Tax Credit Insurance for Energy Projects: PFE Exclusions, Recapture, Diligence, and Claims
Policy Coverage, Uninsured Risk, Basis Exposure, and Allocation Between Sponsors and Credit Buyers
About the Course
Introduction
This CLE webinar will discuss using tax credit insurance in transferable energy credit transactions. The panel will examine policy coverage and exclusions, recapture and prohibited foreign entity (PFE) risks, underwriting and diligence, basis exposure, and managing claims.
Description
Tax credit insurance has become an important tool for transactions with transferable clean energy tax credits. These policies can protect against risks arising from issues in credit qualification, basis, structure, or recapture. The scope of insurance coverage may vary widely. Policy exclusions, periods, limits, and claim provisions may leave the buyer or sponsor with significant exposure.
Recent changes to the clean energy credit framework add further complexity. Section 50(a)(4) creates a new 10-year recapture rule for certain payments involving specified foreign entities. Because the Section 6418 regulations governing transferred credits were adopted before this new rule, they do not clearly address how the new recapture provision applies when a credit has been transferred. Notice 2026-15 provides some interim guidance on PFE restrictions and material assistance but does not resolve that uncertainty.
Further, an insurer will not simply cover a tax credit because the parties believe it qualifies. The insurer wants documentation supporting the credit's validity and calculation. PFE compliance, supplier certifications, eligible basis, developer fees and profit, and other qualification issues may impact credit availability and insurability. The 2026 Alta Wind decision provides an object lesson in substantiating eligible basis and the documentation and valuation support insurers may expect when underwriting basis risk.
Listen as our panel explores tax credit insurance coverage and exclusions, ways to allocate uninsured risk between parties, how to conduct and document due diligence, and more.
Presented By
Ms. Lefko focuses her practice on all areas of federal income tax law, with a particular emphasis on renewable energy and project finance tax issues. She represents developers, lenders and investors in various energy and renewable energy projects, including transactions involving section 45 production tax credits, section 48 investment tax credits and other renewable energy incentives. Most recently, Ms. Lefko has been advising clients on the impact of the Inflation Reduction Act of 2022. She frequently represents purchasers and sellers of renewable energy projects. Ms. Lefko regularly advises buyers, sellers, brokers and lenders on transferability. She also advises non-US businesses of US companies, offshore funds and multinationals on tax aspects of domestic and international project finance and a variety of US inbound international business transactions.
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Ms. Speck advises clients on the qualification for and the monetization of energy transition tax incentives. She has worked on a range of energy transition projects, including onshore and offshore wind, solar, combined heat and power, biogas property, carbon capture, hydrogen and clean fuel credit projects. Ms. Speck has firsthand knowledge of the carbon capture industry, having served as the senior manager of tax and regulatory compliance at Navigator CO2 Ventures LLC from April 2022 through October 2023. At Navigator, she led all aspects of tax qualification, utilization and reporting compliance for federal income energy tax credits, and served as Navigator’s sole liaison with the US Department of Energy. Ms. Speck also provides tax advice on traditional purchase agreements, including the sale and purchase of tax credits, joint ventures, financings and other general transactional work.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, November 19, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Tax credit insurance in transferred credit transactions: allocating risks to seller, buyer, and insurer
II. Coverage, exclusions, limits, and policy period
III. Recapture and the PFE coverage gap
IV. Underwriting and diligence
V. Basis and qualification risk: Alta Wind, etc.
VI. Claims and dispute management
The panel will review these and other key issues:
- Determining which transferred credit risks are covered, excluded, or retained
- Addressing PFE exposure, Section 50(a)(4) recapture, and differences in statutory risk period and the policy term
- Best practices to ensure and document that diligence supports credit qualification, underwriting, and reasonable cause
Related Courses
Tax Credit Insurance for Energy Projects: PFE Exclusions, Recapture, Diligence, and Claims
Thursday, November 19, 2026
1:00 PM ET/10:00 AM PT
