Recurrent Energy transfers $103 million in tax credits for Oklahoma project

The owner and operator of the 160 MW North Fork Solar project signed the tax credit facilitation agreement with Bank of America.

June 27, 2024 Anne Fischer

A Recurrent Energy solar installation.

Image: Recurrent Energy

Recurrent Energy, a subsidiary of Canadian Solar, signed a $103 million tax credit facilitation agreement with Bank of America for its North Fork Solar Project.

The tax equity agreement is Recurrent Energy’s first production tax credit (PTC) transaction and first tax credit transfer transaction. Recurrent reports that by transferring tax credits to Bank of America, it can access funding more quickly and efficiently.

In April the Internal Revenue Service (IRS) released final guidance for the transfer of clean energy tax credits, a provision within the Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) act that allow tax credit owners to sell their credits to other entities with a tax appetite.

Under a tax credit transfer transaction, renewable energy developers and owners can sell tax credits for cash, making financing easier for new clean energy projects. The transferability option is generally open to the entities that are not covered by the direct pay option. More information in the frequently asked questions section can be found here.

Oklahoma Municipal Power Authority (OMPA), which serves 42 municipally owned electric systems in Oklahoma, will purchase 100% of the energy produced by North Fork Solar under a 15-year agreement. This marks the first solar project in OMPA’s energy mix. Recurrent Energy will continue to own and operate the project long-term.

“This addition will further diversify our energy sources and provide our member cities with more energy options to offer their customers,” said David Osburn, OMPA general manager. “We look forward to maintaining a long-term relationship with Recurrent Energy.”

The 120 MWac North Fork Solar project, which sits on 1,012 acres in Kiowa County, Oklahoma, will provide enough electricity to power the equivalent of 35,000 homes year.

This project greatly increases the amount of solar installed in the state of Oklahoma, which ranked 46^th for installed capacity in Q1 2024 with 189 MW, according to the Solar Energy Industries Association. At that time the Covington Solar Farm at 13.2 MW, which came online in 2017, was a landmark project.

Construction by Blattner began in August 2023 and was compete in June 2024 with approximately 250 people employed during peak construction and three permanent jobs during operation.

According to Recurrent Energy’s website, the project used construction methods to minimize grading and removal of soil, and preserved topsoil was redistributed across the graded areas to assist in growing ground cover as quickly as possible.

Recurrent Energy reports that during the project’s development and construction, the company supported local initiatives, including the Snyder 4-H and FFA, Snyder Prom, and Cyclone Educational Foundation. Now that it’s operational, the solar project will contribute about $26 million to community services.

Recurrent Energy began developing North Fork Solar in 2018. NordLB and Rabobank provided project financing for North Fork Solar. CRC-IB and Latham & Watkins advised Recurrent Energy on the tax credit transfer transaction.

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