SELLERS
Tax Credit FAQs
We're here to answer questions about selling tax credits on your renewable energy project.
General Process & Eligibility
How does the tax credit transfer process work?
Ever.green connects sellers with potential buyers through a matching process (i.e., bid/auction). Following this, due diligence is conducted, and a purchase agreement, along with other necessary documents, is signed. After the project is completed, the seller must obtain an IRS registration number. Once these steps are completed - such as validating the ITC amount and project completion - the transaction is finalized, funds are transferred and all required documents are filed with the IRS.
To better understand the buyer diligence process, review our Buyer Diligence Guide.
Who can sell or buy tax credits on the Ever.green marketplace?
Sellers: Renewable energy developers and project sponsors with eligible technologies like Utility-Scale, Commercial & Industrial (C&I), Community Solar, Wind, Storage, Biogas, Geothermal, Microgrids, and EV charging projects. Note for residential sellers, we support tax credits from landlords but not homeowners at this time.
Buyers: Corporate buyers, high-net-worth individuals, and partnerships seeking to reduce their tax liability.
What types of tax credits are there, and what are they worth?
Investment Tax Credits (ITCs): Based on a percentage of the project’s value and earned when the project becomes operational. Value can be equal to the project’s costs related to eligible technologies or “eligible costs,” plus reasonable developer’ fees, or it can be based on the value of a third-party sale backed by an independent appraisal.
Production Tax Credits (PTCs): Earned over 10 years and earned each year based on the amount of energy generated by the project during that year.
Credit values vary based on factors such as project size, location, compliance with the prevailing wage, and apprenticeship requirements. The Inflation Reduction Act also introduced bonus credits for using domestic materials, locating projects in energy communities, and serving low-income areas.
The Ever.green marketplace supports the following ITC & PTC credits:
- Energy Storage (ITC): Provides a credit for standalone energy storage projects.
- Clean Electricity Production Credit (CEPC): Tech-neutral production credit for facilities that generate clean energy, starting in 2025.
- Clean Electricity Investment Credit (CEIC): Tech-neutral investment credit for clean energy projects, starting in 2025.
- Low-Income Communities Bonus Credit (ITC): Bonus credit for renewable energy projects located in low-income communities or benefiting low-income individuals.
- Energy Community Bonus Credit (ITC/PTC): Credit for installing alternative fuel vehicle refueling property, such as EV charging stations.
- EV Charging Infrastructure Credit: Credit for installing alternative fuel vehicle refueling property, such as EV charging stations.
- Alternative Fuel Vehicle Refueling Property: Credit for installing charging infrastructure for electric and other alternative fuel vehicles.
What types of projects and technologies generate tax credits for sale?
Eligible projects include solar, wind, energy storage, geothermal, biogas, microgrids, EV charging stations, and other renewable energy technologies. Depending on the technology, these projects generate either ITCs or PTCs, which can be sold once the projects are placed in service and the credits are earned.
How do I determine tax credit eligibility?
Eligibility depends on the type of renewable energy project, compliance with specific requirements (such as prevailing wage and apprenticeship), and project location.
Ever.green’s IRA Map helps developers assess their eligibility for bonus credits by entering a project’s location and evaluating factors like energy communities or low-income census tracts.
How do I get a registration number for my tax credit?
To register your project, you must submit details to the IRS through their registration portal, including documentation showing the project’s eligibility and operational status. Once the IRS approves the registration, they will issue a registration number, which is required for transferring the tax credits.
For more information, watch the tutorial from the IRS on the pre-registration portal and review the IRA manual.
Is there a deadline for completing a transfer?
Yes, the transfer must be completed by the due date of the seller’s tax return for the year the credits were earned.
For individuals and corporations with a calendar year ending on December 31, the deadline is typically April 15 (or October 15 with an extension). Partnerships and S corporations must file by March 15 (or September 15 with an extension). Sellers with different tax years generally have the same amount of time following their tax year-end to make these filings.
Have all the regulations necessary to complete a transaction been released yet?
While the IRS has provided guidance on many key aspects of tax credit transfers under the IRA, certain regulations are still evolving. Only tech-neutral ITC and PTC credits will be available for projects that do not begin construction before 2025, and finalization of proposed guidance on tech-neutral credits and on EV charging ITCs is forthcoming. It’s important to stay updated on IRS announcements to ensure compliance.
Subscribe to Ever.green’s blog to stay up-to-date on key regulatory changes and tax credit guidelines.
Diligence & Documentation
What documentation is needed to sell tax credits?
To sell tax credits, you need to provide project documentation proving eligibility and operational status. This may include contracts, proof of ownership, compliance records (such as meeting prevailing wage and apprenticeship requirements), and the IRS-issued registration number.
For a comprehensive required documentation list, download our Tax Credit Monetization Readiness Guide.
What kind of third-party verification do I need to sell my tax credits?
Buyers often require third-party verification to ensure that the tax credits are legitimate. This may involve third-party due diligence reports, cost-segregation analyses, and confirmation of compliance with tax credit regulations.
Can I receive non-cash payment for tax credits?
No, under the Inflation Reduction Act, payments for tax credits must be made in cash. Acceptable forms of payment include wire transfers, checks, or ACH transfers. Non-cash consideration is not allowed.
What steps are required to finalize a tax credit transfer?
Finalizing a transfer requires completing due diligence, signing a purchase agreement, and securing an IRS registration number. Afterward, both the seller and buyer must file tax returns along with a transfer election statement. Once all documentation is in order, the transaction can close, and funds are transferred.
Selling on the Marketplace
How do I list tax credits for sale?
To list your tax credits for sale, simply visit the Ever.green marketplace and provide the required project details such as location, size, technology, project stage, and documentation. After review and approval, Ever.green will notify its network of buyers about your listing.
How does Ever.green support sellers in transferring tax credits?
Ever.green provides a streamlined process for sellers, including facilitating the matching process with buyers, facilitating due diligence, and offering templates for purchase agreements. We also work with third-party advisors to verify tax credit eligibility and manage the overall transaction process through our platform.
What factors impact the price tax credits are sold for?
Pricing is influenced by the type of project, technology, project status, buyer protections, and market demand. Credits from operational projects with lower risk and compliance certifications often command higher prices.
At what stage in the development process should I create my listing?
Buyers prefer credits from projects that have met key milestones, reducing the risk of delays or non-compliance. We recommend listing your credits after the notice to proceed date, once you have secured interconnection and permits.
Can I sell my tax credits if my project is still under construction?
Yes, you can list tax credits from projects that are under construction, but buyers will often wait until the project is operational and the credits are earned before completing the purchase.
What happens if I sell my tax credits but my project is delayed?
If your project is delayed, it may impact the timing of the tax credit transfer. You may need to negotiate new terms with the buyer or provide indemnification for any potential risks associated with the delay.
What do buyers look for in tax credits?
Buyers look for deals where key elements of the credit, such as identification of eligible costs and compliance with prevailing wage rules are clearly documented. Offering indemnification, third-party insurance, and third-party verification of key elements can also make your credits more attractive to buyers.
How long does it take for tax credits to sell on Ever.green?
The time it takes to sell tax credits can vary based on project size, technology, and market demand. Credits from operational, low-risk projects tend to sell more quickly. The average time frame can range from weeks to a few months.
What happens if a buyer backs out of a tax credit sale?
If a buyer backs out prior to signing a binding purchase agreement, Ever.green will work with you to find another buyer in our network. Our marketplace is designed to match projects with multiple interested buyers.
My project documentation has confidential information. How is it kept secure on the marketplace? Who has visibility?
Only authorized parties involved in the transaction, such as buyers, due diligence teams, and the Ever.green team will have access to your project documentation. All data is stored and shared through encrypted channels.
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