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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Energy

Date & Time
  • event Date

    Thursday, February 29, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will guide counsel to parties involved in financing energy projects on using inverted lease tax equity structures. The panelist will dive into inverted leases and current issues in such transactions.

Faculty

Gabrielle Jacques
Senior Associate
Norton Rose Fulbright LLP

Ms. Jacques is a senior associate in Norton Rose Fulbright's New York office. Gabrielle's practice is focused on federal income tax law, with particular emphasis on renewable energy transactions.

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Harriet Amelia Wessel
Associate
Norton Rose Fulbright, LLP

Ms. Wessel is an associate in Norton Rose Fulbright's Houston office. Her practice focuses on federal and state income tax matters, including domestic and cross-border mergers and acquisitions, federal and international tax planning, renewable energy investment transactions and energy tax credits. Ms. Wessel also has significant experience representing clients in all aspects of federal and state tax controversies. Most recently, she has been advising clients on the impact of the Inflation Reduction Act of 2022.

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Description

When using inverted leases, the renewable energy company assigns customer agreements to a tax equity investor who collects the customer revenue and pays most of it to the renewable company as rent. The energy company passes the investment tax credit to the tax equity investor but keeps the depreciation. The energy company takes the asset back when the lease is terminated.

Inverted leases provide several advantages, including lower exit costs, more efficient tax benefits, and no basis reduction. However, they also have some downsides, including a potentially higher tax structure risk.

The structure is used mainly for solar projects but can be used for any project on which investment tax credits will be claimed. There are two forms of inverted leases.

Listen as Gabrielle Jacques, Senior Associate at Norton Rose Fulbright, provides an in-depth discussion of inverted lease tax equity structures. The panel will discuss the business, financial, and tax reasons behind choosing such a structure, the different structural variations, and the tax risks involved.

Outline

  1. Current state of the solar finance market and trends for the near future
  2. Inverted leases
    1. How they work
    2. Basic lease terms
    3. Timing considerations
    4. What is "market" on allocation of tax risks
    5. Other current issues in deals
  3. Structure variations

Benefits

The panelist will review the advantages and disadvantages of:

  • An inverted lease versus alternative tax equity structures
  • Different variations of inverted leases