Lower your tax bill at a compelling IRR and guide your organization to a greener future.

Example Buyer Process

1.) Assumptions

  • Buyer has estimated taxable income of 100M for fiscal year 2024 and a 21% effective Federal Tax Rate. This buyer is a C-Corporation or an individual or partnership with large passive income tax liabilities.

  • The buyer elects to use Green Credit Collective (GCC) to source a carefully curated portfolio of clean energy tax credits at an average discount of 12% (i.e. every $1 of tax credits costs 88 cents).

  • Note: discounts will very based on a number of criterion and market forces.

2.) Credit purchases

  • Buyer purchases tax credits with cash at the beginning of the year and uses $4.62M in credits as opposed to quarterly payments of $5.25M to the IRS to satisfy their tax liability.

  • This results in the buyer paying $18.48M for clean energy tax credits instead of paying $21M in Federal tax on an annual basis.

  • Equates to an IRR of about 31% with cash payment in February and credits applied quarterly.

3.) Administrative details we facilitate

  • Obtain a unique IRS registration number from the clean energy projects.

  • Gather credit seller indemnification letters, and documentation verifying cost basis and integrity of the projects producing the credits..

  • Complete a transfer election statement with the credit seller.

  • Buyer files tax returns as they normally would and includes the above information to adhere to section 6418 IRS code.

4.) Risks

  • Recapture Risk; the clean energy tax credit seller needs to operate the business for 5 years.

  • Tax credit seller needs to meet criteria set forth by section 6418 underlying credit types.

  • Clean energy project producing the credits needs to be operational in same year as buyer’s tax liability.

5.) Risk mitigation

  • Green Credit Collective (GCC) can help facilitate insurance coverage for certain risk factors.

  • Each clean energy project is carefully diligenced with 3rd party cost appraisals and tax credit sellers provide indemnification letters.

  • GCC has an extensive network of sellers in the event that a project completion date is delayed and needs to be replaced.

6.) Other Benefits

  • In addition to the economic benefits, buyers can help achieve their ESG goals.

  • Buyers incur no fees to GCC, as those are born by the seller.

  • We often have the ability to source tax credits by associated type of clean energy as well as geographic preferences.