65.17 F
London
July 4, 2024
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

MoEngage Launches Purpose-Built Solution Aimed to Help Financial Institutions Adapt Faster to Evolving Consumer Expectations

D.William

Financial results | Givaudan

D.William

Amazon, Alphabet, and Nvidia attract new interest from Wall Street’s biggest investors

D.William

Leave a Comment

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