Solar Policy, Economics, and Sustainability Flashcards

Under the Inflation Reduction Act structure, a project meeting prevailing wage and apprenticeship requirements multiplies its base ITC rate by what factor?

Answer: 5

The 6% base credit is multiplied by five, to 30%, when the labor requirements are met.

How much does the domestic content bonus generally add to an IRA-era ITC for a project that meets the labor requirements?

Answer: 10 percentage points

The domestic content adder is 10 percentage points for projects meeting the labor requirements, or 2 points otherwise.

What does IRA 'transferability' allow a solar project owner to do?

Answer: Sell eligible tax credits to an unrelated taxpayer for cash

Section 6418 lets eligible taxpayers sell credits to unrelated buyers, usually at a discount.

Which entity can typically use IRA 'elective (direct) pay' to receive solar credits as a cash payment?

Answer: A municipal utility or other tax-exempt entity

Direct pay is mainly for tax-exempt entities such as governments, tribes, and nonprofits.

Under a typical state renewable portfolio standard (RPS), what do compliance entities usually retire to show compliance?

Answer: Renewable energy certificates (RECs)

Each REC represents 1 MWh of renewable generation, and utilities retire RECs to meet RPS obligations.

A solar REC (SREC) is created for each unit of solar generation. What is that unit?

Answer: 1 MWh

One SREC is issued for each megawatt-hour of solar electricity generated.

Which financing mechanism lets a property owner repay solar costs through a special assessment on their property tax bill?

Answer: PACE financing

Property Assessed Clean Energy (PACE) loans are secured and repaid through property tax assessments.