How do I buy renewable energy tax credits?

Background

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Historically, federal tax credits technically have not been transferable. This meant that for those project developers without any tax liability, if their tax credits were not refundable, some of their tax credits would be worthless. 

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The Inflation Reduction Act (IRA), passed in 2022, included a new provision that allows project owners to sell eligible clean energy tax credits for cash to third-party businesses. Selling the transferable tax credits (TTCs) are a new way for renewable energy project owners to monetize their credits and is an alternative to complex tax equity partnerships. 

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As the number of renewable energy projects continues to grow, this creates more financing options for projects and allows businesses in all sectors to buy tax credits to support clean energy while reducing their tax liability. It’s a win-win for all companies and helps accelerate the renewable energy industry. 

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Who Can Buy Clean Energy Tax Credits? 

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Businesses in all sectors can purchase eligible renewable energy tax credits.

Technology, CPG, Manufacturing, Real Estate, Healthcare, Oil & Gas, Retail, Automotive, and more

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Typically, buyers fall into the following roles:

• CEOs and Business Leaders
• Board Members
• CFOs and Tax Executives
• Finance Leads at SMBs
• ESG and Sustainability Leaders
• Law Advisors
• Tax Advisors
• Family Investment Firms (support HNW individuals with passive income) 

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Steps to Buying Tax Credits

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1) Put together your goals for purchasing tax credits 

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The goals, deal criteria, timing, etc. can all vary by company. What are your goals? For many, it can be as simple as reducing their tax liabilities in their target tax year and for others it plays into a broader ESG and environmental impact strategy. 

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• How much in estimated credits are you interested in purchasing? 
• Do you have a target credit year in mind?
• What type of credits would you be interested in? (ITC or PTC)
• What is your target timeline to purchase? ‍

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2) Research marketplace partners

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Although you can try to find a seller and transact independently, it most likely is not worth your time, energy, or money.

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There are a handful of considerations in the transaction that can be a lot to navigate if you are new to buying. This includes de-risking the transaction through insurance, authenticating the seller’s identity and validity of the credit, and of course all of the legal contract components. 

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At Atheva, we manage the entire process from match to close. 

• Curated Matches: Our team of experts work with you hand in hand on your goals to match you with a curated set of available credits.
• Due Diligence: Once matched, we provide clear steps and outline your specific needs for sellers to help fast track the transaction.
• Payment Processing: After the contract is executed, we track the credit generation and ensure payments are made. 

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3) Buy credits on the marketplace 

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Once you select your preferred partner, you can buy credit(s) on their marketplace. Some marketplaces don’t have exclusivity clauses, so you have the flexibility, if you choose, to buy in multiple marketplaces. But, that may require more work and ongoing management on your end. 

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At Atheva, once we understand your goals and deal criteria, you can sit back, relax, and let us manage the matching and deal process. 

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• Be matched with compatible sellers
• Get your target price
• De-risk your purchase 
• Transact with ease 
• Connect with repeat sellers

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Whether you are a first-time or seasoned buyer, we’re here to help you buy in confidence from getting the best price to limiting your risk.

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Learn more or get started today — contact us!

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