Renewable Energy & Clean Fuels

Subscribe to Renewable Energy & Clean Fuels via RSS
IRS Internal Revenue Service documents and folder.

The Inflation Reduction Act (the “IRA”) provides funding for several tax credit incentives related to significant investments in energy projects.  One of these credits is the section 48C investment tax credit (“48C Credit”), which was originally offered through the American Recovery and Reinvestment Act of 2009.  The IRA includes a $10 billion allocation to the 48C Credit and also broadens the scope of eligible property a company can invest in to be eligible for the credit.  If selected, the 48C Credit provides a credit equal to 30% of the project’s capital investment that is deemed to be “eligible energy property.”

Syndicated term loans can be a significant piece of the capital stack when financing renewable energy projects; however, a crucial pending case in the U.S. Court of Appeals for the Second Circuit could complicate the use of these types of loans going forward. The case—Kirschner v. JP Morgan Chase—will seek to answer the central question at play: are syndicated term loans subject to federal and state securities laws?  The eventual ruling in this case could potentially impact any borrower or lender issuing or holding a term loan in a syndicated facility.

The generation of sustainable green energy using solar energy panel photovoltaic cells and wind turbine farms is a friendly enterprise. Concept of clean, sustainable development. Generative AI

ESG and Renewable Energy

As corporations experience increased pressure from shareholders, consumers, employees, and the federal government to adopt Environmental, Social, and Governance (“ESG”) goals, many are procuring renewable energy as one way of meeting environmental targets. In 2022, more than 96% of S&P 500 companies published an ESG or other formal sustainability report.[1] In addition to voluntary goals and initiatives, the Securities and Exchange Commission is in the process of finalizing enhanced and standardized climate and ESG disclosure requirements for publicly traded corporations. As a result, corporate renewable energy power procurement is expected to account for nearly 40% of the projected utility-scale wind and solar project growth through 2023 and 2024 in the United States.[2]

Solar panels with sunset and blue sky background. Clean power en

As nations continue developing renewable energy infrastructure to meet sustainability targets, some are creating unique approaches to ensure they meet their stated goals. In what is expected to be a first for any nation (developed or otherwise), the Energy Ministry of Israel is enacting new country-wide regulations requiring all new non-residential buildings to have rooftop solar panels. 

The U.S. Environmental Protection Agency (“EPA”), which administers the federal renewable fuels program known as the Renewable Fuel Standards (“RFS”), has long considered the potential impact of electric vehicles on the RFS. Specifically: how can the RFS (under which transactable credits known as Renewable Identification Numbers (“RINs”) are generated by the creation and use of renewable fuels) be adapted to address renewable fuel converted not into traditional compressed or liquified fuel, but instead into electricity used to power electric vehicles?

As healthcare systems continue their bid to “first, do no harm,” more attention is being placed on the organizations’ broader impact on their communities, including the environment and air quality.  It is estimated that the global health care industry is responsible for two gigatons of carbon dioxide each year, or 4.4% of worldwide net emissions.  And according to a September 2019 report by Health Care Without Harm, over half of the industry’s emissions (representing an estimated 2.2% of the worldwide net emissions) can be attributed to the health care industry’s use of energy. The energy-intensive nature of the industry correlates with the often 24/7 use of health care facilities and the high-tech, life-saving equipment. 

Washington DC Capitol detail on cloudy sky

An increased borrowing limit for the U.S. was not the only change brought about by the recently enacted Fiscal Responsibility Act of 2023. The National Environmental Policy Act (NEPA) review process was also on the minds of our legislators. Indeed, Congress chose to use the debt ceiling fight as a vehicle for implementing several changes to NEPA aimed at improving project authorization and management and establishing timelines for completing the review process. While not all the changes in the so-called Builder Act are dramatic, a handful of them could provide additional certainty for those in the oil and gas and renewables industries seeking federal approval for their projects.

Law, notary, attorney background theme

The renewable energy industry is growing rapidly but it faces several challenges, including ever-increasing competition amongst developers for rights to the same land. This creates a race between developers to encumber project land.

Negotiating and executing a lease is normally more time-consuming than recording it, but recording the lease agreement (or other applicable real estate instrument) is not a step that should be overlooked or delayed. A lease is effectively meaningless to anyone not a party to it until it has been recorded in the public records of the county in which the leased property is located. Once the lease, or evidence of the lease, has been recorded, everyone not a party to it is put on notice and any agreement encumbering the leased land after that date is typically subordinate to the lease.