Tax equity has been the primary way to finance solar projects in America. But it has sometimes proven difficult. There are a limited number of entities with enough tax liability to invest large pools of money.
Concerns over a tax equity bottleneck helped spur the creation of new financial tools, such as securitization and YieldCos. But it’s not as though tax equity is in such short supply that companies are struggling to raise money.
“Tax equity remains the most expensive capital in most solar projects today,” said Shayle Kann, senior VP of GTM Research. “But leading developers have consistently proven their ability to raise enough tax equity to sustain their rapid growth and build out their pipelines.”
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