San Francisco based investment management firm Foss & Company has launched of a web platform designed to optimise the tax equity investment process for renewable energy developers in the US.
The company made the announcement on Tuesday, during the Solar Power International trade show in Las Vegas, US.
Arranging financing for commercial and industrial solar projects is challenging, and getting to a term sheet with a qualified tax equity investor that can close, is the most difficult part of assembling the capital stack, the investment firm noted.
According to the financial planner, there are only a handful of highly active tax equity investors, and the whole process often appears cumbersome and confusing due to high variability in each project, intricacies of tax code, deal structure and interests of debt providers.
Because of this, a considerable amount of due diligence must be conducted on each project, driving up costs and resulting in a slow evaluation process.
It noted that these factors set a relatively high barrier to entry for developers; most professional tax equity investors won’t work with developers with projects or portfolios less than 3MW in size.
Tax equity investment platform
The company’s managing director, Alex Tiller, said: “The goal with TaxEquity.com is to allow more capital to flow to more renewable energy projects. We can achieve this by standardising the way we interface with developers and evaluate their projects.
“Additionally, we will work with debt providers to generate standardised and preapproved documents that a developer can choose to use, which leads to a streamlined evaluation process.”
Tiller continued: “Combining the two previous steps with algorithm driven analyses, we hope to cut the time to terms sheet down to hours, rather than days.”
Tiller added that in the near future, they would like to find a way to fund projects as small as 100 kilowatts in size.
Renewable energy project developers can evaluate the system on www.taxequity.com and introduce themselves, execute a mutual non-disclosure agreement, and provide details about their projects.
The more detailed the information that is provided, the faster the response time that can be expected, the company stated.
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