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Abstract: 

The Inflation Reduction Act gives taxpayers two options for monetizing the Internal Revenue Code’s energy-related tax credits—a “direct-pay” election and the ability to sell credits to third parties for cash. These options will give developers more flexibility to finance renewable energy and carbon reduction projects and may reduce or eliminate the need for these projects to rely on traditional tax equity. This article considers structuring opportunities in light of these changes. Copyright © 2023 by Jones Day. The views and opinions set forth herein are the personal views and opinions of the authors; they do not necessarily reflect views or opinions of the law firm with which they are associated.

Keywords: Inflation Reduction Act of 2022, direct pay, energy credit transfers, credit monetization, pre-development energy credit transfers, limitation on use of general business credits, financing, intermediary broker, accounting treatment, Commodity Exchang

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