Copying and distributing are prohibited without permission of the publisher
Partnership flip or lease?
21 September 2010
Roughly 18 months after the stimulus bill made it possible, leasing has taken off in the US wind market. But with the US renewables incentive regime in flux, the familiar partnership flip structure still has its adherents. By Tom Nelthorpe.
Read more:
[leasing]
[tax credit]
The US wind finance market became a refuge for leasing professionals as their market collapsed. For some of them it was a comfortable exile. The production tax credit (PTC) was – until February 2009 – the main means by which the US encouraged the installation of wind generating capacity. The $0.021 per kWh subsidy was available only to the producer, could not be transferred, and was only of use to corporations that were not subject to the alternative minimum tax.
The financial sector added flexibility to the PTC via the partnership flip structure, an adaptation of an old template – once used to reward unconventional gas (shale, synthetic and biogas) producers – to the demands of the wind industry. Wind project companies became partnerships with two types of equity – class A developer equity and class B tax equity. The class B equity, typically underwritten by a financial services company,...
Take a free website trial to read this article. It’s easy to get a trial – just follow this link or email info@projectfinancemagazine.com.
Or, if you’re a subscriber or have an active trial, simply log in below to read the article.
Subscribe
Subscribers have unlimited access to all current and archive content. Start your
subscription today - click on the button below.
Subscribe
Free trial
Taking a free trial will give you access to the latest news and analysis, as
well as the online deals database, BenchBase. Start your free trial today.
Free Trial