Black Bear Energy announced its first successful transfer of solar tax credits from a real estate investment trust (REIT) with help from clean energy finance company Evergrow. This deal, executed on the Evergrow platform, includes multiple solar projects installed on multifamily properties in California and Washington, DC, with a total capacity of 556 kW and ranging in size from 66 kW to 195 kW. This transaction will open doors for broader participation of REITs in renewable energy projects and unlock the monetization of the investment tax credit, accelerating the deployment of on-site renewable energy sources in the commercial real estate sector.
The IRA enabled ITC transfers for the first time. However, it was unclear whether there would be a market for REITs to sell their tax credits because these projects are smaller in size 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, customers evaluated project returns with and without the benefits of the tax credit sale,” said Drew Torbin, founder and president of Black Bear Energy. “With this transfer we have proof of concept that there is a demand for loans of this size and risk profile. This is important because proceeds from ITC sales typically boost returns by 300 basis points and more than 600 basis points for certain projects that qualify for the 10% bonus.”
By using technology to build a modern clean energy financing platform, Evergrow unlocks greater access to financing for REITs investing in solar energy systems of all sizes and accelerates our transition to a sustainable economy.
“We are excited to collaborate on this groundbreaking approach to tax credit financing, tailored to the unique needs of commercial real estate in 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 to improved returns while supporting the commercial real estate industry’s sustainability goals.”
News item from Black Bear Energy
