FEATURE ARTICLE

February 2009

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Tax Equity Financing in the Renewable Energy Industry: What Next in 2009 and Beyond?

Much ink and airwaves have been devoted in the past year to the promise of a “green” economy and “green” jobs as the incoming administration’s prime strategy both to fight global warming and to bolster a troubled domestic economy. But the viability of a future “green” economy that effectively combats climate change is dependent on a consistent and reliable stream of financing for renewable energy projects. Tax equity financing is a financing structure that has proven effective in financing renewable energy projects in recent years due to the ability of investors to efficiently use federal tax benefits generated by renewable kilowatts. Whether this structure can or should survive in its current form—particularly given the current economic climate—is the $64 billion (or greater) question.