Andy Moon is CEO and co-founder of Reunion, and in this episode, we're diving into clean energy tax credits. Tax credits may not be the most exciting topic, but they play a crucial role in financing clean energy projects. The Inflation Reduction Act has given a significant boost to tax credits in two key ways.
First, it has expanded tax credits to cover various project types, including solar, wind, battery storage, biogas, hydrogen, and carbon sequestration, among others. This broadening of eligibility creates more opportunities for tax credits. Second, it has made tax credits transferable, which means they can change hands. This change is expected to bring more capital into play, making it easier to finance these projects. Andy and Reunion estimate that the pool of clean energy tax credits in the U.S. currently stands at around $20 billion per year and could grow to $75-80 billion per year in the next five years.
Reunion serves as a marketplace for clean energy tax credits. They connect buyers and sellers, making it easier to purchase and sell transferable tax credits to support various clean energy projects, such as solar, wind, battery, biogas, and more. During our conversation, Andy discusses his extensive background in clean energy, starting with his work at SunEdison in 2009 and founding SunFarmer in 2014. Most importantly, we explore how tax credits function and how transferability can boost the clean energy financing market.
In this episode, we cover:
- [02:48]: Andy's background in renewable energy finance
- [06:28]: Overview of investment tax credits (ITCs)
- [11:52]: Overview of production tax credits (PTCs)
- [13:07]: Other types of tax credits opened up by the IRA
- [14:19]: What tax credit transferability means
- [16:21]: Diverse group of potential buyers interested in tax credits
- [17:49]: Example of a $100M solar project with $50M in ITCs
- [21:29]: Market size and growth projections for tax credits, new buyer profiles
- [23:36]: Using tax credit savings to fund corporate sustainability initiatives
- [29:24]: Reunion's role connecting buyers and sellers, streamlining diligence process
- [32:25]: Reunion's growth and the volume of credits on the platform
- [35:49]: The role of tax credits in corporate finance and potential buyers
- [38:02]: Expansion into different clean energy technologies
- [39:17]: Reunion's financing and future business model
- [40:46]: Who Andy wants to hear from
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Episode recorded on Sep 15, 2023 (Published on Oct 5, 2023)
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*Editing and post-production work for this episode was provided by The Podcast Consultant
