The Inflation Reduction Act has supercharged clean energy investment in the US through generous tax credits for renewable energy projects. But monetizing those credits can be cumbersome, especially for smaller project developers. My guests today are working to change that.
In this episode of The Clean Power Hour, Tim Montague speaks with Eric Underwood and Derek Silverman, co-founders of Basis Climate, about their new platform designed to help streamline and democratize tax credit transfers for clean energy projects.
Erik Underwood has spent his career developing, investing in, and operating sustainable infrastructure projects across the world for developers and private equity investors alike. Having transacted nearly $2 billion of renewable energy transactions in the US and abroad, Erik is an experienced industry professional who is passionate about accelerating clean energy finance. Erik formerly worked at Aela Energia, Marathon Capital, and Mainstream Renewable Power.
Derek Silverman is a software engineer turned product manager, Derek was on the founding team at CrowdTangle, a social media analytics tool acquired by Facebook in 2016. Prior to forming Basis, he was leading product at Rewiring America, the leading electrification non-profit.
Together they saw an opportunity to leverage technology to make tax credit transactions more efficient, enabling faster deployment of clean energy capital. They discuss how tax credit transfers work - where a company generating tax credits from a solar, wind, or storage project can sell those credits to a corporation looking to reduce their tax liability.
Eric and Derek explain how their platform brings buyers and sellers together to facilitate these transactions, reducing friction through standardized diligence checklists, documentation, and processes. They share details on two projects they enabled - a $60M credit transfer from a large storage project and a $600k credit transfer from a small commercial solar installation.
They highlight how Basis Climate is focused on democratizing access to tax equity, allowing smaller project developers to tap this market rather than having to sell projects to larger players. The platform also helps expand the pool of buyers by educating new corporate buyers on the opportunity.
Eric and Derek discuss their goals of reducing the transaction timeline to one month through streamlined documentation and processes. They also touch on how they are expanding beyond solar, wind, and storage to support other IRA clean energy tax credits.
Overall, an insightful conversation on how Basis Climate's platform can accelerate clean energy finance and deployment by smoothing the way for tax credit transfers.
Key Takeaways
1. How exactly do tax credit transfers work for clean energy projects?
2. What are the key steps in the tax credit transfer process?
3. How can tax credit transfers allow smaller developers to tap tax equity?
4. What other clean energy tax credits will Basis Climate support besides solar, wind and storage?
5. What size projects can benefit from tax credit transfers?
Social Media Handles
https://www.linkedin.com/company/basisclimate/
https://www.buildwithbasis.com/
https://twitter.com/basisclimate
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0:00 - Introduction
2:00 - Founders' backgrounds
5:22 - How tax credit transfers work
14:09 - Basis Climate's platform explained
19:50 - Using AI to streamline solar energy transactions.
22:34 - Walkthrough of tax credit transactions for buyers and sellers.
27:22 - Tax credit transactions and insurance
30:50 - Case studies of completed deals
34:41 - How does the Future of Basis Climate Look Like
37:41 - Conclusion
