Black Bear Energy announced its first successful solar tax credit transfer from a real estate investment trust (REIT) with help from Evergrow, a clean energy finance company. Executed on Evergrow’s platform, this deal covers multiple solar projects installed on multifamily assets in California and Washington, D.C., totaling 556 kW and ranging in size from 66 kW to 195 kW. This transaction will open doors for broader REIT participation in renewable energy projects and unlock the monetization of the investment tax credit, accelerating the deployment of onsite renewables in the commercial real estate sector.
The IRA enabled ITC transfers for the first time. However, it was unclear if there would be a market for REITs to sell their tax credits because these projects are magnitudes smaller than traditional utility-scale tax equity transactions. REITs also have special tax, accounting and business requirements that require the support of trusted and knowledgeable partners.
“Prior to this transaction, clients would evaluate project returns with and without the upside from the sale of the tax credit,” said Drew Torbin, founder and president of Black Bear Energy. “With this transfer, we have proof of concept that demand exists for credits of this size and risk profile. This is significant as the ITC sale proceeds typically increase the returns by 300 basis points and upwards of 600 basis points for certain projects which qualify for the 10% bonus adder.”
By using technology to build a modern platform for clean energy finance, Evergrow is unlocking greater access to funding for REITs that invest in solar systems of all sizes and accelerating our transition to a sustainable economy.
“We are thrilled to collaborate on this pioneering approach to tax credit financing, tailored to commercial real estate’s unique needs when making sustainable investment decisions,” said James Richards, CEO of Evergrow. “By unlocking tax credit financing for REITs, Black Bear and Evergrow are forging a new path for improved returns that simultaneously support the commercial real estate sector’s sustainability objectives.”
News item from Black Bear Energy
