Wind and solar drive new U.S. tax credit market

Washington D.C. Correspondent

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<header><h1>Wind and solar drive new U.S. tax credit market</h1><a href="" rel="author"></a><span class="title"></span><time rel="pubdate" datetime="2024-08-29T00:00:00-04:00">Aug 29</time></header><p>Solar and wind tax credits are dominating a nascent market launched a year ago to drive up cleantech investment in the United States, according to a <a href="http://www.cruxclimate.com/2024-midyear-market-report" target="_blank" rel="noopener">recent report</a> tracking these transactions.</p><p>Formally launched in summer 2023, the market for clean energy tax credits was created by the 2022 Inflation Reduction Act to enable new clean energy developers, who often owe few taxes in the early stages of a project, to sell their unused credits for cash that they can reinvest into cleantech projects.</p><p><span data-teams="true"><span class="ui-provider a b c d e f g h i j k l m n o p q r s t u v w x y z ab ac ae af ag ah ai aj ak" dir="ltr">At least four out of five of these transactions involved tax credits from producing and investing in solar, wind, storage and combined solar and storage projects, according to the report by Crux,</span></span> which provides a platform for buying and selling credits and tracks such purchases. In the first half of 2024, Crux estimates $9 to $11 billion worth of clean-energy transactions took place.</p><div class="callout">Checkout Cipher’s <a href="https://www.ciphernews.com/articles/changes-in-us-tax-rules-provide-big-boost-for-renewables/" target="_blank" rel="noopener">explainer</a> from earlier this year on ‘tax credit transferability,’ the boring-sounding and super important idea behind this tax credit market.</div><p>“This market has continued to grow in size, technological diversity and depth, driving billions of dollars of new private-sector investments into energy infrastructure and domestic manufacturing,” said Crux CEO Alfred Johnson.</p><p>Given the strong interest and demand for this readily available capital among investors and clean energy developers, Johnson told Cipher the tax credits market is expected to nearly triple to $25 billion by the end of the year.</p><p>While technologies like solar, wind and storage have dominated the market to date, Johnson anticipates a growing share of transactions in advanced manufacturing, bioenergy, nuclear and other technologies by the end of the year.</p><p>The growth in the tax credit market reflects the surging interest in clean technology writ large. In the first six months of this year, a record $83.7 billion were invested in making and deploying clean technology, according to the Clean Investment Monitor, a database by the research firm Rhodium Group and Massachusetts Institute of Technology&#8217;s Center for Energy and Environmental Policy Research.</p>
Wind and solar drive new U.S. tax credit market

by  - 

August 29, 2024


Solar and wind tax credits are dominating a nascent market launched a year ago to drive up cleantech investment in the United States, according to a recent report tracking these transactions.
Formally launched in summer 2023, the market for clean energy tax credits was created by the 2022 Inflation Reduction Act to enable new clean energy developers, who often owe few taxes in the early stages of a project, to sell their unused credits for cash that they can reinvest into cleantech projects.
At least four out of five of these transactions involved tax credits from producing and investing in solar, wind, storage and combined solar and storage projects, according to the report by Crux, which provides a platform for buying and selling credits and tracks such purchases. In the first half of 2024, Crux estimates $9 to $11 billion worth of clean-energy transactions took place.
Checkout Cipher’s explainer from earlier this year on ‘tax credit transferability,’ the boring-sounding and super important idea behind this tax credit market.
“This market has continued to grow in size, technological diversity and depth, driving billions of dollars of new private-sector investments into energy infrastructure and domestic manufacturing,” said Crux CEO Alfred Johnson.
Given the strong interest and demand for this readily available capital among investors and clean energy developers, Johnson told Cipher the tax credits market is expected to nearly triple to $25 billion by the end of the year.
While technologies like solar, wind and storage have dominated the market to date, Johnson anticipates a growing share of transactions in advanced manufacturing, bioenergy, nuclear and other technologies by the end of the year.
The growth in the tax credit market reflects the surging interest in clean technology writ large. In the first six months of this year, a record $83.7 billion were invested in making and deploying clean technology, according to the Clean Investment Monitor, a database by the research firm Rhodium Group and Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.