Renewable Energy & Energy Transition Tax Services

We provide cost segregation services to support the allocation of project costs for investment tax credit and tax depreciation purposes. Additionally, we can provide valuation services, including appraisals, to support project lifecycle, production tax credit project repowers, development fee mark-ups and value maximization strategies.

Transfer pricing support can be provided to support development fee structures, purchase and sale agreements, shareholder loans, O&M, and EPC pricing and terms.

Leo Berwick has the complex-industrial property tax expertise to provide guidance on the future tax implications of a transaction, new asset development, and ongoing operations. Property tax is administered on a state and local level and assessment methods used vary based on the geographic area. Our property tax team understands these nuances as well as the renewables industry and we will work with you to provide clear guidance on your investments. We can work with our clients to classify assets appropriately for the filling of the first property tax rendition and this often includes working with the government assessors to obtain the most advantageous valuations.

We are specialists in property tax modeling. We can create the property tax model or we can review the property tax assumptions and calculations within your current model.

Property tax credits and incentives are a critical part of renewable projects. Leo Berwick can evaluate current PILOT’s and abatements. We can also assist in the negotiations of new credits and incentives including tax increment financing, abatements and Fee-in-Lieu of Payments (FILOT).

We have extensive experience in multi-state property tax appeals. We can evaluate your current asset portfolio and identify property tax savings and refund opportunities. This can include teaming with our cost segregation and valuation specialists to support property tax values.

Our team can work with you to build a full suite of post-close property tax services including property tax compliance, controversy, and audit defense. This can include annual updates to models and track property tax changes due to capex spend or rate changes during the project holding period.

While there are many exemptions that are available for sales and use tax that apply in the renewables space, we find that many of our clients do not have the expertise and/or the resources to properly identify these opportunities. By leveraging our team of sales and use tax experts with renewable and industry expertise, we are able to review development costs and ongoing operational spend for sales and use tax refund opportunities. Given that the sales tax rate in many jurisdictions exceeds 8%, this can often result in significant cash savings and increased EBITDA.

We provide formal tax opinions, tax memoranda and ad-hoc advice in connection with the determination of federal incentives that may be available across myriad technologies under the following statutes::
i. Section 45, 48, 45Y, and 48E investment and production credits;

1. Section 45X and 48C manufacturing and production credits;
2. Section 45Q carbon oxide sequestration credit;
3. Section 45Z clean fuel production tax credit; and
4. Section 45V clean hydrogen production credit.

We prepare documentation, processes, and calculations to support 1) assertions of compliance with the prevailing wage and apprenticeship requirements 2) the availability of various federal tax credit “adders” available in connection with energy and low-income communities, as well as domestic content 3) placed in service dates for tax depreciation and credit purposes and 4) start of construction analyses and 5) tax “repower” opinions for production tax credit projects .

We assist clients with navigating the tax credit transferability rules introduced under the Inflation Reduction Act, including the registration and tax reporting requirements included in proposed regulations.
For potential credit purchasers, we assist with buy-side tax credit due diligence, purchase and sale agreement review (including the review of buyer tax indemnities), and tax-capacity modeling (including consideration of CAMT, BEAT, and Pillar 2)

For potential credit sellers or brokers we can provide sell-side diligence services, including the navigation of proposed sale requirements and reporting. In certain circumstances, our team can also provide limited tax credit placement and sourcing support.

For tax credit insurers, we provide tax advisory to support underwriting policies that backstop credit recapture or other events that might reduce a project’s overall after-tax value.

In connection with the prevailing wage and apprenticeship requirements established for various of the federal tax credit incentives, we provide 1) process design to capture and document compliance 2) ongoing compliance and tracking services 3) memoranda detailing client processes and procedures and our view as to the adequacy of those processes and procedures in fulfilling these requirements (often in connection with sell-side diligence services) and 4) buy-side diligence services in connection with the adequacy of a target’s attendant procedures.

We provide tax opinions, memoranda and ad-hoc advice to support assertions of tax ownership in complex financing and ownership structures. At Leo Berwick, we’re familiar with identifying and designing complex tax ownership structures to drive the tax outcome you expect. Our team has a breadth of knowledge in complex lease and financing arrangements that often present questions regarding tax ownership. We have assisted developers and private equity backed platforms navigate these issues to ensure that the tax credit and other tax benefit being obtained as part of the transaction are appropriately allocated and that economic objectives are realized.

We provide financial accounting advisory services for those mechanisms typically attendant to tax credit monetization transactions including 1) hypothetical liquidation at book value (HLBV) and Proportional Amortization Method (PAM) for tax equity transactions and 2) buyer and seller reporter for the purchase and sale of credits under Code section 6418.