Tax credit transfer platform Reunion shares buyer habits and trends for 2025.
Under the Inflation Reduction Act of 2022, the investment tax credit and production tax credit awarded to clean energy projects like solar and energy storage are transferrable entities with tax liabilities.
In 2024, nearly $25 billion was directed toward the clean energy projects in the United States via tax credit transfer transactions, according to Reunion, a credit transfer platform.
Reunion, which facilitated $3.5 billion in tax credit transaction volume in 2024, surveyed its corporate buyer customers to provide insights for the 2025 tax credit transfer market.
The company said that 85% of its buyers plan to purchase the same or more volume of credits in 2025, suggesting the market remains strong. Over half of the surveyed buyers said they plan to “max out” their credit purchases to offset their due taxes.
Three factors influence buyer’s decisions, said Reunion. Unsurprisingly, price is a top factor, with buyers wanting the best deal possible. They also consider the timing of payments. Nearly half of buyers want to pay at or close to the time that they can realize the tax credit’s benefits, minimizing the time needed to “pay out of pocket” for credits.
Reunion said a third criterion is credit. Certain buyers have focus on specific credit types, such as larger single assets being preferred over distributed portfolios, or traditional projects like solar, wind and storage being preferred over emergent technologies.
Buyers have shown a willingness to pay a premium for credits from investment-grade sellers, said the report, with more than 60% of buyers saying they are 1 to 2 cent premium. Less than 10% of its surveyed buyers said they are indifferent about whether a seller is investment-grade.
Reunion recommended that buyers act earlier in the year to have better options available on the market and avoid competitive bidding. In 2024, it said that an abundance of buyers entered the market in the second half of the year. It expects a similar scenario in 2025 as buyers gain clarity on tax liabilities.
The company said buyers can achieve better pricing by purchasing tax credits that are perceived as complex, for example by purchasing portfolios of credits from smaller projects like residential and commercial projects. Reunion said it helped buyers perform diligence on portfolios that contain hundreds of discrete projects.
Reunion noted that one-third of buyers said change in law and uncertainty may cause them to delay purchases this year. On the campaign trail, President Trump proposed cutting corporate tax rates by 21% to 15%, potentially shrinking buyer appetite for tax credit purchases.
“Despite this policy uncertainty, the market for tax credits is as busy as we have ever seen, with buyers looking to purchase credits while mitigating any risks from potential changes in law,” said Reunion.
Read the full report on corporate clean energy tax credit buyer perspectives and strategies, and Reunion’s handbook on tax credit transfer transactions.
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