A recent change in the U.S. tax code is set to increase investments in clean energy dramatically. As reported by Canary Media, this new legislation is expected to bring in $25 billion for clean energy projects. This influx of money will help move the country from relying on fossil fuels to using more renewable energy sources instead, impacting the entire industry.

The most important takeaway from this change is that it allows more types of investors to benefit from clean energy tax credits.

With previous limits lifted, financial groups like insurance companies and pension funds can invest in clean energy. This broader access to tax benefits will likely boost financial commitment from different sectors, encouraging more innovation and use of sustainable energy solutions.

However, there is a caveat: a company’s fiscal benefits are restricted to the taxes it pays annually. An innovative solution has emerged over the past few decades to navigate this limitation: the tax equity market.

This flourishing financial sector, now valued at approximately $20 billion per year, allows banks and large financial institutions to collaborate with clean energy developers. By leveraging their tax credits, these institutions can effectively diminish their substantial tax obligations while fostering increased investment in solar, wind, storage, and other clean energy initiatives.

This tax code update is not just about money; it’s a significant step in the U.S. effort to combat climate change. By supporting renewable energy, the country is creating jobs and leading the way in reducing carbon emissions globally. As more money flows into clean energy, the effects will be wide-reaching, marking the start of a new period of growth and sustainability.

Article: The Tax Code Change Unleashing $25B in Clean Energy Investment