Tax Incentive Barriers in the Way of Green Energy Adoption

renewable energy
renewable energy


Alexander Christodoulakis guides PBS SA Capital Group and the Portland Marine Group of Companies. It manages a host of maritime and energy holding-investment companies. Focused on expansion strategies for businesses, he has helped effectively reposition major companies worldwide. Alexander Christodoulakis’ interests extend to the environment, and he was particularly interested in clean energy.

In the United States and elsewhere, a major constraint to the expansion of renewable energy capacities had to do with availability of tax equities that underpin large-scale projects. Given the right incentives to mitigate long-term risks, investors are more than willing to place capital in clean energy facilities.

Tax equity bolsters green capital through enabling projects to be repaid through tax credits and other forms of cost savings. U.S. renewable power does enjoy some government incentives in the form of the Production Tax Credit (which favors wind energy) and the Investment Tax Credit (which favors solar). Unfortunately, the system of front-loaded tax credit-based subsidies does not allow the plant operators and investors to fully utilize the credits during the early years of operation, when cash flow is tight and returns have not been realized.


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