ABSTRACT
This chapter reviews some of the external components that need to be addressed, quantified, monetized and documented when the finance structure is developed. The most significant external component to enhancing returns to the parties in the renewable energy project are federal tax credits and to a lesser extent, state tax credits when available. The Energy Policy Act of 2005 made many changes to section 45 of the Internal Revenue Code of 1986, as amended. The federal tax benefit to the bond holder is greater than the benefit derived from tax-exempt municipal bonds. A qualified project is a renewable energy facility described in section 45(d) of the Internal Revenue Code of 1986, without regard to the placed-in-service date requirements under that section.
