Greenbacker Capital Management (“GCM”), a leading renewable energy asset manager, announced that, through an affiliated investment vehicle, it has completed a $148 million tax equity financing commitment with RBC Community Investments. The commitment—one of the very first tax equity deals to utilize the solar production tax credit (“PTC”)—is helping finance one of the largest solar projects in GCM’s fleet.
To date, only a handful of solar PTC deals have been completed in the renewable energy industry. Although the PTC has been available for wind energy projects for decades, it wasn’t until the passage of the Inflation Reduction Act (“IRA”) that the tax credit was extended to solar power.
GCM has placed RBC Community Investments’ $148 million investment with the overall financing for GCM’s largest renewable energy project: the 240 MWdc Appaloosa Solar 1 (“Appaloosa”). The utility-scale solar plant broke ground last year in Iron County, Utah, where it generates revenue for the area, supports construction-related clean energy jobs, and funds a scholarship for students who plan to remain local while pursuing their career goals.
The Greenbacker organization has a years-long track record of successfully executing on tax equity investments, bringing dozens of tax equity–financed renewables projects online, and utilizing the federal investment tax credit (“ITC”) for its solar projects. However, this is its first deal involving the new solar PTC.
“Partnering with RBC Community Investments to complete one of the first ever solar PTC deals and finance our largest project to date is more than an important milestone for GCM, it’s an essential step forward for the energy transition,” said Charles Wheeler, President of GCM. “This is proof positive that the landmark IRA legislation is accelerating a clean energy future.”
The deal is also GCM’s first transaction with RBC Capital Markets, a global investment bank committed to providing $500 billion in sustainable finance by 2025.
“We couldn’t be more pleased to be selected and trusted by GCM to provide tax equity on this milestone solar PTC project. The development and installation of clean energy in a market headquartered by our co-investor, FJ Management, was a welcome feature in the execution of Appaloosa’s post-IRA closing,” shared Yonette Chung McLean, Managing Director and Head of RBC’s renewable energy tax equity investments and syndications.
Prior to the IRA, solar projects were only eligible for the ITC. Today, solar projects can choose between either the ITC or the PTC, which currently offers a 2.75 cents per kilowatt-hour credit for electricity produced by solar energy and other renewables.
GCM was advised on the deal by Sheppard, Mullin, Richter & Hampton; Allen & Overy represented RBC Capital Markets.