Energy management company Schneider Electric has facilitated $1.7 billion in tax credit transfer transactions since late 2023. The 18 deals span across various sectors, including renewable energy projects, battery storage and other clean energy technologies.
A year ago the Internal Revenue Service (IRS) released final guidance for the transfer of clean energy tax credits, a provision within the Inflation Reduction Act (IRA) 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.
“Navigating the complexities of federal tax credits can be challenging, but tax credit transfers have proven to be a powerful solution for securing funding and driving progress,” said Steve Wilhite, the president of Schneider Electric’s sustainability business.
Schneider Electric said its strategy is to provide advisory, financial and due diligence services for tax credit buyers to optimize their investments. Schneider said it has been able to streamline its process for tax credit transfers by collaborating with a range of different types of companies. Schneider said its notable collaborations include Silfab Solar, Kimberly Clark, Crux and Engie, among others.
(Read: The rise of transferable tax credits in clean energy finance)
The transactions were facilitated through Schneider’s sustainability business, which it said is one of the largest advisors on corporate renewable energy procurement.
“Tax credit transfers have rapidly become a key enabler for clean energy investment, opening new financial pathways that both established companies and first-time buyers can leverage,” said John Villali, the senior research director of IDC Energy Insights. “We’re seeing robust growth as these transactions can free up capital for deployment in renewables, battery storage, and other low-carbon technologies.”
Paris-based Schneider Electric is a Fortune Global 500 company formed in 1836 as a steel, mining and electrical service company. From 1981 through 1997, the company divested out of the steel, mining and shipbuilding markets to become a full-service electric solutions provider, primarily through acquisitions. In May 2021, the energy solutions provider launched a retail website to sell distributed resources such as solar and energy storage products.
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