Black Bear Energy and Evergrow Lead New Wave of Commercial Real Estate Solar Tax Credit Transfers
July 09 2024 - 8:30AM
Business Wire
With the Inflation Reduction Act creating new
tax credit transfer opportunities, this agreement unlocks new
capital for REITs to maximize returns through on-site renewable
energy investments.
Black Bear Energy (Black Bear), a Legence Company specializing
in onsite renewable energy, today announced with Evergrow, a clean
energy finance company, their first successful solar tax credit
transfer from a Real Estate Investment Trust (REIT). Executed on
Evergrow's platform, this landmark deal covers multiple solar
projects installed on multifamily assets in California and
Washington DC, totaling 556 kW and ranging in size from 66 kW to
195 kW. This transaction will open doors for broader REIT
participation in renewable energy projects and unlock the
monetization of the investment tax credit, accelerating the
deployment of onsite renewables in the commercial real estate
sector.
The Inflation Reduction Act of 2022 (IRA), the largest
investment in clean energy in U.S. history, enabled ITC transfers
for the first time. However, it was unclear if there would be a
market for REITs to sell their tax credits because these projects
are magnitudes smaller than traditional utility-scale tax equity
transactions. REITs also have special tax, accounting, and business
requirements that require the support of trusted and knowledgeable
partners.
“Prior to this transaction, clients would evaluate project
returns with and without the upside from the sale of the tax
credit,” said Drew Torbin, Founder and President of Black Bear
Energy. “With this transfer, we have proof of concept that demand
exists for credits of this size and risk profile. This is
significant as the ITC sale proceeds typically increase the returns
by 300 basis points and upwards of 600 basis points for certain
projects which qualify for the 10% bonus adder.”
Without Evergrow, REITs would not know where to start to find
buyers of their tax credits, particularly for projects on the
smaller end of the scale. By using technology to build a modern
platform for clean energy finance, Evergrow is unlocking greater
access to funding for REITs that invest in solar systems of all
sizes and accelerating our transition to a sustainable economy.
“We are thrilled to collaborate on this pioneering approach to
tax credit financing, tailored to commercial real estate’s unique
needs when making sustainable investment decisions,” said James
Richards, CEO of Evergrow. “By unlocking tax credit financing for
REITs, Black Bear and Evergrow are forging a new path for improved
returns that simultaneously support the commercial real estate
sector's sustainability objectives."
About Black Bear Energy:
A Legence and Blackstone Portfolio Company, Black Bear Energy is
a technology-enabled, commercial buyer’s representative
specializing in onsite renewable energy and cleantech services. In
the past nine years, Black Bear has helped its clients bid out over
2,000 clean technology projects in more than 20 states through its
data-driven process. For more information about Black Bear Energy,
visit BlackBearEnergy.com.
About Evergrow:
Evergrow is a specialty finance company that provides funding
for clean energy projects in the United States. The company's
modern platform provides tax credit financing for clean energy
project developers and owners. Evergrow is backed by leading
venture capital firms and individuals. For more information about
Evergrow, visit Evergrow.com.
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Media Contacts Jack Shaw legence@antennagroup.com