Category Archives: Environment

Solar Tax Equity Investing Today

Solar Tax Equity Investing Today

As we head into the fourth quarter of 2020, now is a great time for corporate taxpayers to review estimated liability and reassess the utility of using the solar ITC this year. This year in particular, there are several factors that make this “last look” at solar tax equity investing especially practical and timely.

The Blurred Income Picture
Windmill Capital Management talks to corporate taxpayers and CPA firms throughout the year. In a typical year, we may hear from one or two tax equity investors that wait to assess their tax equity appetite as their views on projected taxable income take form. This year, of course, was different.

As the COVID-19 pandemic increasingly impacted the US, beginning in late March, almost every taxpayer we speak with took a pause on their internal projections. The environment was incredibly uncertain and CFOs had no frame of reference to estimate future income, let alone potential extraordinary expenses.

Tax equity investing, therefore, virtually ceased. With business at a standstill, imports and exports on hold, an unsteady and inconsistent government response, and nothing more than a hazy picture of 2020 taxable income, tax equity discussions were meaningless.

Development on Hiatus
Meanwhile, solar developers and projects went on hiatus. Many projects were interrupted by state or local shelter-in-place orders and / or work stoppages. Even after operating restrictions were lifted, supply chain disruptions continued to keep many projects on idle.

Clouds Are Clearing
Since the beginning of summer, the entire nation has adjusted to a new way of business and, in many respects, a new way of life. Businesses have reached a “new normal” for revenues and operating expenses. Some industries are likely to see ongoing “extraordinary” expenses as business continues to adjust, but earnings visibility has improved significantly.

Meanwhile, solar developments are, for the most part, back on line. The weeks or months of forced delay cannot be made up, and estimates are new solar capacity growth will be flat to 2019, but new projects continue to come on line. Some expected 2020 projects are now expected to be completed in 2021. But we foresee the fourth quarter of 2020 as a big period for interconnection of new projects.

Need for Renewable Energy More Evident Than Ever
The summer of 2020 also brought into stark relief the future of climate change. Wildfires raged in the West. The Southeast had yet another prolific hurricane season. The Northern Hemisphere experienced the warmest summer on record. Every region of the US saw new climate extremes. These events portend another “new normal” in the absence of significant action to mitigate climate change.

A Robust Quarter for Solar Tax Equity
Based on these observations we expect 4Q to see substantial tax equity investment activity. Modest tax equity investment to date and improved earnings visibility will spur greater investor interest. Substantial 4Q solar project completions will provide ample investment opportunity. Recent and ongoing climate change events highlight the need for immediate action on clean energy.

Act Now
Contact us to discuss immediate opportunities in solar tax equity investments. Our national network of developers has a robust pipeline of near-term project completions ready for your review. We are available to help identify, underwrite, structure and execute your next tax equity investment now.

Clean Energy and Cannabis Linked by New Illinois Regulations

Clean Energy and Cannabis Linked by New Illinois Regulations

The State of Illinios recently enacted regulations that require medical and recreational cannabis producers to meet strict energy and water usage limitations. As a result of these regulations, clean energy and cannabis will be linked inextricably in the state. Windmill Capital Management first wrote about the benefits of distributed clean energy resources, particularly cogeneration, for… Continue Reading

U.S. Solar 2 Million Strong

U.S. Solar 2 Million Strong

The Solar Energy Industries Association (SEIA) announced last week that U.S. solar installations reached the two million mark. U.S. solar reached this significant milestone just three years after surpassing the one million installation threshold in 2015. Forecasts predict three million U.S. solar installations by 2021 and four million by 2023. Windmill Capital Management sees the… Continue Reading

Direct Investment in Renewable Energy for Family Offices

Direct Investment in Renewable Energy for Family Offices

Investors are allocating a greater share of capital to socially responsible and environmental, social and governance (ESG) conscious strategies. A January 2018 Harvard Business Review article noted that at the beginning of 2018, more than $11.6 trillion were invested in ESG investment strategies. That equates to $1 of every $4 invested in the United States.… Continue Reading

Earth Month Ends

Earth Month Ends

The Earth Day Network represents over a billion people around the world focused on bringing about a better future. Through a number of key campaigns, Earth Days educates and activates toward specific ends. Windmill Capital Management’s posts for Earth Month 2019 have attempted to draw attention to the importance of protecting species around the globe,… Continue Reading

Earth Month and Sea Turtles

Earth Month and Sea Turtles

Sea turtles are some of the oldest species on earth, having existed for more than 100 million years. They are found in tropical and sub-tropical seas around the world. Marine reptiles, they breathe air and lay their eggs on sandy beaches. In fact, sea turtle mothers return to the same beach on which they were… Continue Reading

Earth Month Look at Sharks

Earth Month Look at Sharks

As Earth Month continues, we turn our attention for this post to sharks. Archeological evidence indicates that sharks have been around for more than 400 million years. There are more than 500 species of sharks, which vary in size from six inches to 39 feet long. Sharks are known as apex predators, which means they… Continue Reading

Earth Month Look at Coral Reefs

Earth Month Look at Coral Reefs

Today as we celebrate Earth Month we’re taking a bit of a different turn to look at coral reefs. Coral reefs are located in more than 100 countries and cover close to 110,000 square miles of the earth’s surface. In spite of their relative abundance, coral reefs aren’t typically top of mind in the fight… Continue Reading

Earth Month: All About Bees

Earth Month: All About Bees

From the very large (see our post on elephants published last week) to the very small: today’s Earth Month post is about bees. Bees are extraordinary creatures. Wild bee species populate every climate in the world, from forests to deserts to the arctic. Honeybees are a common site in our fields and gardens. But these… Continue Reading

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