Companies that structure renewable energy investments to allow investors to achieve returns through tax credits should also understand that the income statement impact of renewable energy investments can be particularly complex.
Observations from the front lines provides PwC's insight on current economic issues, our perspective regarding the business impacts, and actions we have seen companies taking to effectively address those issues.
Beware of cliffs and waterfalls in renewable investments: February 2013
Companies are attracted to renewable energy investments for different reasons, including regulatory, financial, and other social motivations. Renewable investments are frequently structured to balance the various goals, including allowing investors to achieve returns through certain tax credits.
Tiered capital structures that facilitate a “waterfall” of returns and allocations are commonly used to ensure efficient use of tax credits. Companies have frequently found that gaining an understanding of the income statement impact of these structures in renewable energy investments can be particularly complex.
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