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Key Takeaways | In the Room Where It Happened

On August 25, McDermott Will & Emery kicked off its latest 10-part weekly webinar series focused on navigating the new energy landscape following the enactment of the Inflation Reduction Act of 2022 (the Act)—the largest and most important climate action in US history.

During the first webinar, McDermott Partners Carl Fleming and Edward Zaelke hosted Greg Wetstone, president and CEO of the American Council on Renewable Energy (ACORE), for a discussion on the conversations leading up to this historic legislation and its future impact on the renewable energy industry.

Below are key takeaways from the discussion:

1. The Act represents a major win for the renewable energy industry, particularly its extension of tax credits up to a 10-year (or potentially longer) period, allowing businesses in the energy sector to plan on stable tax platforms for longer than a couple of years—something that is truly unprecedented for the renewables industry. Other major highlights include the introduction of tax credits for energy storage and new technologies, such as hydrogen, programs to encourage domestic manufacturing and the monetization of tax credits. The McDermott Energy & Project Finance team has already seen a spike in standalone energy storage mergers and acquisitions (M&A) activity and a heightened interest in financing structures.

2. Of further noteworthy importance is the Act’s introduction of the ability to transfer tax credits. Although the direct pay provisions of the Act were not as broad as hoped for by many, Greg believes that the transferability provisions will have a significant impact on the renewable energy market. In his view, the constraints on transferability are minimal and allow for the monetization of credits without partnership flips or sale-leasebacks, although there may still be a role for these types of transactions. According to Greg, the market will likely see a mix of tax equity structures and other kinds of financing as there is now more latitude as to how to monetize these credits. The Energy & Project Finance team is currently advising on a number of innovative structures to allow clients to capitalize on this new game changer for tax credits.

3. Another notable feature of the Act is the ability to stack credits related to domestic content, energy communities and wage and apprenticeship requirements. Although further regulations and guidance are needed in these areas, it is agreed amongst industry specialists that appropriately stacking these incentives could make renewable energy projects much more lucrative while creating beneficial societal impacts, such as building a domestic workforce and supply chain and transitioning away from fossil fuel-driven economies. The Energy & Project Finance team is working with various clients to narrow down such requirements and to help properly “stack” these credits.

4. Reducing greenhouse gas emissions was a true driving force behind the Act and is a meaningful step toward addressing climate issues. However, the devil will be in the details regarding how [...]

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Key Takeaways | Legislative Update on Renewable Energy Tax Incentives

On November 17, McDermott Partners Philip Tingle and Heather Cooper were joined by Bill Parsons, COO of the American Council on Renewable Energy (ACORE), for a discussion on recent legislative activity regarding renewable energy tax incentives and how it will affect current tax credits as well as those in the center of the renewables space.

Below are key takeaways from the webinar:

1. Negotiations surrounding the Build Back Better Act and progress regarding the substance of the bill have been moving at a rapid pace. Despite some uncertainties, the hope is that something will be passed before year-end—and the tax credits component is likely to look very similar to the current proposal.

2. A shift in thinking has taken place in US Congress, specifically, the clean energy tax regime is now seen as a credible driver in achieving the Biden administration’s decarbonization and climate goals.

3. Industry participants are assessing whether the direct pay component of the Build Back Better Act will dramatically change the tax equity market. Several factors will determine how direct pay will affect said market, including the timing of payments, Internal Revenue Service (IRS) scrutiny, availability of depreciation and tax basis step-ups, permissiveness of waivers, congressional oversight and the proposed minimum book tax.

To access past webinars in this series and to begin receiving Energy updates, including invitations to the webinar series, please click here.




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Five Takeaways: The Energy Market in 2021 – From Crisis to Opportunity

The energy market has undergone significant change in the past 12 months, with even more on the horizon. Our webinar series explores how these changes have shaped—and will continue to impact—the energy industry, including discussions of what’s to come.

Our latest webinar featured Greg Wetstone, president and CEO of the American Council on Renewable Energy (ACORE).


Below are key takeaways from this week’s webinar:

  • The renewable energy industry continued to grow throughout the Trump administration; 2020 was a banner year with 28.5 GW of new wind and solar (the previous record, in 2016, was just below 23 GW).
  • The renewable industry is likely to receive its first legislative action as part of the infrastructure bill (likely through the budget reconciliation process); however, it will likely not occur until after impeachment proceedings and a COVID-19 relief bill have been completed.
  • It is not clear that a clean energy standard could be passed through the budget-oriented reconciliation process or that carbon pricing would have sufficient votes to even pass the reconciliation process, so the best current option may be to continue and expand tax incentives for renewable energy.
  • The Biden administration has committed to a “whole of government” approach to clean energy, which is expected to include an aggressive Federal Energy Regulatory Commission (FERC) policy once a third commissioner is appointed in June; sweeping executive orders (some of which we have already seen); aggressive federal procurement targets; streamlined permitting; and broader Department of Energy guidance in innovation.
  • A refundable tax credit at 85% of the current value is very much on the table, but it remains to be seen whether there are sufficient votes in the Senate for this to make it through the reconciliation process.

To begin receiving Energy updates, including invitations to the webinar series, please click here.

Access past webinars in this series.




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Five Takeaways: An In-Depth Look at the Federal Legislative Game Plan to Support Renewables

On Thursday May 14, McDermott was joined by Gregory Wetstone, president and chief executive officer of the American Council on Renewable Energy (ACORE) to discuss the latest market updates on the severe disruption and uncertainty brought on the renewables industry by COVID-19.

Five takeaways from this week’s webinar:

      1. There is no clear insight yet into what a congressional relief package regarding renewable energy might look like, despite the fact that congress is discussing its fifth COVID-19-related response bill.
      2. Even though the outlook was already pessimistic, clean energy job loss has been worse than expected; there has been a loss of 94,000 jobs in the renewable sector between March and April and 600,000 additional unemployment claims across the clean energy sector.
      3. Renewables have a great potential to continue to be part of the nation’s economic recovery; two of the fastest growing job categories in the nation have been wind turbine technicians and solar panel installer.
      4. Senior Department of Energy officials have reassured that the recent bulk power executive order is a continuation of existing policies regarding transmission corridors and is not targeted at renewables, which are recognized as valuable for national security. See the Office of Electricity’s Q&A and contact email for a response to President Trump’s signed Executive Order, “Securing the United States Bulk-Power System” and join McDermott on May 21 for a legal analysis of the EO.
      5. The commerce department is undertaking an investigation which could lead to the imposition of additional tariffs, particularly in regards to transformers; the timing for these tariffs (if enacted) is likely right before the election.

Listen to the full webinar.

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