Aspen Power completes first solar ITC transfer deal

Aspen Power announced the successful closing of the company’s first solar Investment Tax Credit (ITC) transfer deal. The transaction with private investor Dan Kalafatas monetized the ITCs generated by five projects located across California and New York.

“This ITC transfer deal is a pivotal milestone for Aspen Power, underscoring our ability to navigate the evolving complexities of solar finance,” said Bill DeLong, chief financial officer, Aspen Power. “By leveraging this innovative structure, we not only fortify our existing portfolio but also unlock new pathways for future growth and strategic development. This transaction sets a precedent for how Aspen Power will continue to drive value and innovation in the renewable energy sector.”

The transaction’s structure spans both 2023 and 2024 projects, showing Aspen Power’s ability to adapt and capture value across multiple tax years. The innovative structure enables Aspen to optimize project returns ensuring steady growth while maximizing the value of the credits.

Recent changes to the ITC under the Inflation Reduction Act have expanded the flexibility and scalability of financing for solar projects. The extension and expansion of the ITC to allow direct transferability enables solar developers like Aspen Power to transfer tax credits to third-party investors, providing a new way to monetize these credits without relying solely on traditional tax equity investors. By “selling” the tax credits generated by its solar projects to private investors who can use them to reduce their tax liabilities, Aspen Power gains immediate cash flow, which it reinvests into new projects, fueling further growth in the renewable energy sector.

News item from Aspen Power