52.27 F
London
March 30, 2025
PI Global Investments
Finance

Financial Engineering for Green Energy


The way that the US government encourages a lot of green energy projects is by giving them tax credits. If you build a power plant that runs on certain sorts of renewable resources, the Internal Revenue Service will give you some money — call it 0.3 cents per killowatt-hour — for generating that power, which you can use to reduce your taxes.

That is a reasonably safe stream of cash flows. Not totally safe — your plant could burn down, prices could collapse or costs could rise so much that it is no longer economical to run it, the tax code could change — but broadly speaking you can estimate how much power the plant will produce per year and then multiply that by 0.3 cents to get a fairly predictable annual tax credit.



Source link

Related posts

For finance titans, the US economy rules

D.William

Finance boss quits Metro Bank after turbulent year for lender

D.William

Stocks to Watch: Vedanta, LIC Housing Finance, Reliance Industries, Signature Global, SJVN

D.William

Leave a Comment

* By using this form you agree with the storage and handling of your data by this website.