Overview
On March 18, 2025, Philip Tingle joined a panel discussion during Infocast’s Solar + Wind Finance & Investment Summit titled “Tax Credit Transfer Markets: Players, Platforms & Projections” that covered market trends, pricing dynamics, insurance considerations, and the evolving sophistication of buyers in the tax credit transfer market.
Speakers:
- Irina Antonache, Partner, Moss Adams
- Gareth Davies, Executive Director, Santander
- Gabe Rubio, Principal, Sustainability & ESG Tax Co-Leader, BDO USA
- James Stahle, Senior Managing Director, CCA Group
- Jordan Tamchin, Executive Vice President, Tax Insurance Practice Leader, CAC Specialty
- Philip Tingle, Partner, Global Co-Head Energy & Project Finance, McDermott Will & Emery
In Depth
Top takeaways included:
- Large tax credit transfer participants remain aggressive despite the recent US presidential election results, but smaller purchasers with limited tax liability may be more cautious. Most tax credit purchasers require significant protections to minimize any risk associated with the purchased credits.
- Deal structure is the primary factor driving current pricing. Elements such as deferred payment structures, technologies, and insurance requirements can lead to better pricing.
- Insurance continues to play a significant role in transfers. Strong insurance enhances seller creditworthiness and can make deals investment-grade for buyers. Conversely, buyers can attract sellers by reducing their insurance demands (e.g., lower dollar coverage or a reduced scope of insured risks). Additionally, some insurers are becoming more comfortable with higher step-up percentages.
- As the transfer market matures, buyers are becoming more sophisticated. Some corporate buyers are hiring internal teams that specialize in tax credit transfers, fostering a deeper understanding of market risks.
- Tax-equity-backed deals, rather than direct transfers, may be more attractive to buyers due to reduced administrative costs. Many investors view partnership flips as lower risk because of the additional layer of transaction diligence.
