Evergrow makes first transfer of solar tax credit from real estate investment fund

Black Bear Energy announced its first successful transfer of the Solar Energy Tax Credit from a real estate investment trust (REIT) with the help of Evergrow, a clean energy financier. The transaction, executed on Evergrow’s platform, includes multiple solar projects installed on multifamily assets in California and Washington, DC, with a combined capacity of 556 kW and sizes ranging from 66 kW to 195 kW. The transaction will open the door to broader REIT participation in renewable energy projects and unlock the monetization of the investment tax credit, accelerating the deployment of on-site renewable energy sources in the commercial real estate sector.

IRAs allowed ITC transfers for the first time. It was unclear, however, whether there would be a market for REITs to sell their tax benefits, since these projects are much smaller than traditional utility-scale equity transactions. REITs also have special tax, accounting, and business requirements that require the support of trusted and experienced partners.

“Prior to this transaction, clients were evaluating project returns with and without the benefit of the tax credit sale,” said Drew Torbin, founder and president of Black Bear Energy. “With this transfer, we have proof of concept that there is demand for loans of this size and risk profile. This is significant because ITC sale proceeds typically increase returns by 300 basis points and more than 600 basis points for some projects that qualify for the 10% premium.”

By leveraging technology to build a modern clean energy financing platform, Evergrow is providing greater access to financing for solar REITs of all sizes and accelerating our transformation to a sustainable economy.

“We are excited to be working together on this pioneering approach to tax credit financing, tailored to the unique needs of commercial real estate when making sustainable investment decisions,” said James Richards, CEO of Evergrow. “By unlocking tax credit financing for REITs, Black Bear and Evergrow are forging a new path to improved returns that support the sustainability goals of the commercial real estate sector.”

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