It is a given that the U.S. Inflation Reduction Act has been praised as a game changer by American green energy pioneers. This law includes substantial funding in the form of renewable energy investment tax credits and production tax credits, manufacturing facility grants, and new business loans.

There is another key measure for clean energy in Inflation Reduction Act,but the measure has received less attention from the industry:the transferability of clean energy tax credits.This problem is more tough than other measures,but it could have a more significant impact by reshaping much of the building and capital formation of the renewable energy market.

Since the Congress passed Energy Policy Act in 2005,the U.S. government provides investment tax credits for renewable energy development.In almost 20 years after the installed PV system capacity came to 100GW, the U.S. has built PV industry with more than 250000 workers and And laid the foundation for the growth of the renewable energy industry.Although the monetization of tax credits is one of the more onerous financial structures for the construction, closure, maintenance and exit of renewable power generation facilities, these fees are increasing year by year.

The renewable energy generation projects are very similar to other infrastructure projects.Renewable energy developers use upfront cash to cover costs such as land or property leases, engineering, permits and grid interconnection.Then the developers will find some combination of debt and equity,and provide funds for the construction and long-term ownership of renewable energy projects. What’s more, they can get a fixed return based on the basic contract signed by them.

As a whole,Inflation Reduction Act’s budget for clean energy tax credits will have an incredible, necessary impact on the grid. Since the tax credit benefits are transferable,we wish every renewable energy projects are with larger scales,higher developing speeds and lower trade cost.As there aren’t direct methods to provide funds for the projects’ owners,this simple change of law structure can also make important impacts.

To know more information about new energy, please contact SUNERISE Energy right now.As solar panel manufacturer and the provider of the solar solutions,we can answer all your questions about new energy and photovoltaic based on our 13-year professional experience.Our e-mail address: info@sunerise.com