• Overview
  • Experience
  • Team
  • Insight

The United States has used tax credits and accelerated deprecation since the 1960s as an inducement to companies to invest in areas in which the US is trying to direct capital.  Few project developers can use these benefits, and so a core financing tool for industries in which such tax benefits are on offer is using the tax benefits to raise “tax equity” to help fund new projects. Chadbourne has been handling tax equity transactions since the 1960s. It was heavily involved from the 1960s through the 1990s in tax equity for airlines, railroads and power, mining, telephone, trucking and shipping companies.  During this period, it helped develop many new structures and worked on many cutting-edge deals, including  municipal, cross-border double-dip, C-FSC, O-FSC and turbo-FSC leases and sale-in-lease-out, lease-in-lease-out and service contract transactions.

Since 2004, most of the activity has been in the renewable energy sector. Chadbourne is widely viewed as one of the leading tax equity firms in this sector.  For example, it was counsel in 17 of the 18 wind tax equity transactions in 2007. It has handled more than five dozen master tax equity facilities for rooftop solar installations. Term sheets and deal papers that the firm drafted for use in partnership flip and master inverted lease transactions are now standard documents in use in such transactions. It wrote separate manuals on tax issues and solar deal structures for the Solar Energy Industries Association and the Solar Electric Power Association.

The firm represents both sponsors and tax equity investors across multiple asset classes, including solar, wind, geothermal, biomass, fuel cells, and refined coal.

Deals in this market are sensitive to small changes in government policy.  It is dangerous to work on such transactions without keeping an ear to the ground in Washington, DC. Unlike other firms, Chadbourne has a significant part of its team based in Washington and talks regularly to senior Treasury and IRS officials and to the tax staffs on Capitol Hill and plays a role in policy discussions.

Publication Highlights

Solar passed wind as the largest share of the US tax equity market in 2015, but appears, based on preliminary numbers, to have slipped behind wind in 2016. The year ahead could be...
solar, tax equity, SEIA, tax and finance workshop, Partnership Flips, tax change risk, structures, deal volume, market size, tax basis, developer fees
The possibility that Congress will overhaul the US tax code is already having a number of effects on the market. Corporate tax reform is unlikely to start moving through Congress...
tax reform, border adjustment, border adjustability, House, blueprint, corporate tax rates, Trump, renewable energy, wind, solar, tax equity, effect
Two prominent tax equity investors, whose banks accounted for roughly 30% of the big-ticket US renewable energy tax equity market in 2015, and two wind developers talked to a...
wind, tax equity, physical work, DRO, partnership flip, market data, corporate PPAs, yields, rates, developer fees, pay-go
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