Schneider Electric on Feb. 20 announced that it has committed to invest in a portfolio of Texas-based clean energy projects utilizing a Tax Credit Transfer Agreement for solar and battery storage systems developed, built, and operated by ENGIE North America.
The contracted projects are expected to come online throughout 2024.
The agreement between ENGIE and Schneider is among the first at this scale to take advantage of new tax credit transfer provisions in the Inflation Reduction Act (IRA) that will help companies meet their renewable energy goals, Schneider Electric said.
The IRA’s transferability clause enables the transfer of eligible federal tax credits from renewable energy, clean energy manufacturing, and battery storage projects, among other clean energy projects. This new feature creates a feasible alternative to traditional tax equity structures.
Tax credit transfer also enables Schneider’s Scope 2 decarbonization when the investor-buyer procures associated environmental attributes as part of the transaction.
The tax credit transfer opportunities structured by Schneider Electric’s advisory team allow companies to simultaneously reduce Scope 2 emissions, capture favorable risk-adjusted returns on investment, demonstrate environmental leadership, and accelerate progress toward decarbonization goals, it said.
