Overview
The Inflation Reduction Act of 2022 (IRA) transformed the renewable energy industry, extending and expanding tax credits relating to renewables and other energy projects. This transformative change in law requires a deep understanding of the myriad challenges and new opportunities arising from the landmark legislation. With one of the largest, dedicated renewable tax credit teams, McDermott can help you navigate this complicated post-IRA world.
Not only do we understand the complex tax rules governing IRA transactions, but we also understand the unique business needs of our clients. With those needs in mind, our deep bench of talented tax lawyers takes an innovative, solutions-focused approach to transacting under the IRA.
A number of our partners have been recognized as leading practitioners by publications and ratings agencies, such as Chambers USA, IJInvestor, The Legal 500 United States, Law360 and Best Law Firms.
Our lawyers can assist with a variety of IRA-related issues, including:
- Tax Credit Transferability. Historically prohibited under federal tax law, taxpayers can now purchase tax credits generated by renewable and transitional energy projects. McDermott’s energy tax and commercial lawyers have been advising clients on tax credit transfers since the earliest stages of the transfer market, establishing the transaction terms that have shaped the now-robust market. Setting the tone for the market, we advised on the first IRA transfer deals beginning in January 2023 and continue to close on a variety of transfer transactions, including direct transfers, hybrid tax equity with transfers and debt with transfers.
- Bonus Tax Credits. Our team is extremely knowledgeable about tax credit bonuses, including domestic content, energy community, and low-income adders, and has advised many clients on the monetization of these incentives.
- Prevailing Wage and Apprenticeship Requirements. We help clients implement the new prevailing wage and apprenticeship rules that apply to almost all tax credits post-IRA. Whether a developer, builder, buyer or investor in renewable energy projects, we can advise on the application of these rules for credit qualification and ongoing compliance.
- New and Expanded Tax Credits. We have experience with all tax credits under the IRA, including:
- Solar and wind (Sections 45, 48, 45Y and 48E)
- Storage, fuel cell and hydrogen (Sections 48 and 45V)
- Biomass, offshore, refined coal, hydro, waste, biogas and nuclear (Section 45U)
- Renewable natural gas (Sections 48 and 45Z)
- Manufacturing (Sections 45X and 48C)
- Carbon sequestration (Section 45Q)
- Electric vehicles (Sections 30B, 30C, 30D, 45W and 48C)
