Tax credit transferability may sound as boring as a clean energy initiative could get. But the idea is turning into one of the blockbuster successes of the Biden administration’s program to address climate change, suddenly generating billions of dollars for renewable energy projects.

“It’s a big burst. Definitely a big deal,” said Jay Bartlett, a researcher with the energy think tank Resources for the Future who has followed the rapid uptake of this novel new twist to United States tax rules.

The changes to the tax rules, introduced at the beginning of last year but barely used until after guidelines were clarified in June, were estimated to have generated $7 to $9 billion of funding for renewable projects over six months and could reach $83 billion by 2031, according to a report by Crux, a company that advises buyers and sellers in this space. For reference, about $400 billion was invested overall in clean energy projects in the United States last year.

The market for these instruments accelerated quickly, “outpacing our expectations,” according to a related industry survey Crux conducted.

Tax credit transferability is a twist on what’s known as tax equity, a mainstay of financing for renewable energy developers that has become even more important with the passage of the 2022 Inflation Reduction Act. Tax equity denotes the way the U.S. has long used tax breaks to spur certain kinds of investment, particularly for clean energy. Basically, owners of wind and solar projects can deduct the amount they invest to build these projects or subtract the value of energy they sell from their tax bills.

The IRA increases the number of tax breaks clean energy companies can claim, including for locating projects in economically under-developed communities and using domestically manufactured equipment.

Before the IRA, though, most developers couldn’t take advantage of tax breaks on their own. Most owe few taxes during the early life of a project and need money up front to start building. The solution was usually to include a partner with a substantial tax bill, the financial know-how to use the tax break and the money to put up and lock into the project for years as a part owner or equity holder in order to qualify for the tax break.

These partners are almost always big banks, with the biggest of them, JP Morgan Chase and Bank of America, dominating the field. But big as they are, these financial institutions could only take on so many partnerships. This reality has constrained renewable energy construction.

The IRA changed the game, allowing project owners to transfer their tax benefits to any taxpayer, no project ownership required. That change dramatically expanded the pool of candidates who could take advantage of the tax benefit to essentially any company or financial entity that owes taxes but doesn’t want to become an actual partner investor, industry officials say. In that way, the new tax rule hands more money to renewable energy developers.

It also opens the door for companies that aren’t pure financial investors. Schneider Electric, a company that manufactures equipment and advises other companies on how to decarbonize their operations, recently touted a tax credit transfer deal it arranged with the North American renewable energy arm of the French energy company Engie SA.

Schneider agreed to pay Engie $80 million for the tax breaks on several renewable energy projects in Texas. At the same time, Schneider separately agreed to purchase what are known as renewable energy certificates over the life of the project that Schneider can apply to its own decarbonization goals.

The company hopes the transaction will provide a model it can share with other companies in pursuit of their own decarbonization plans, leveraging the transfer of tax breaks, said Hans Royal, a director in Schneider’s clean technology and decarbonization advisory business.

“It’s a game changer,” said Royal.

The tax break transfer option still fills a nascent corner of the clean energy finance market, and both buyers and sellers are working out where the challenges lie. One is the risk embedded in deals. Under the transfer rules, buyers lose the tax benefit if the developer doesn’t qualify for the tax benefit in subsequent years because the project isn’t completed or doesn’t meet other qualifications for receiving the tax break.

That risk has led buyers to pay less for tax breaks from smaller or less-experienced developers, or to purchase specialized insurance that has cropped up as part of the market, said Bartlett.

Still, most in the industry expect the ease of purchasing transfers will make them the primary way tax breaks from the Inflation Reduction Act are realized going forward — and mainstays of funding for building renewable energy in the U.S. through the life of the law.