Transferable Tax Credits

Transferable tax credits granted by the Inflation Reduction Act (IRA) have encountered delays and challenges during their implementation. However, there are promising opportunities for companies in the renewable energy sector to monetize these credits. The setbacks can be attributed to various factors, including the complexity of renewable energy projects, difficulties in administering the incentives, inflation and interest rate hikes, regulatory bottlenecks, and supply chain issues. Nevertheless, the situation is gradually improving as guidance is being provided, inflation stabilizes, permit backlogs are being addressed, and manufacturing capacity expands. It is crucial for companies to consider factors such as timing, proper documentation, risk identification and mitigation, and seeking advice from experts when dealing with transferable tax credits. Despite the obstacles, there are still avenues for companies to leverage these credits and contribute to the growth of the renewable energy industry.