- Nick Sylvestre
Unlocking Opportunity Zone Funding for Solar
Updated: Sep 10, 2020
Have you ever stopped in the middle of the street and said, “I wish someone would just hit me over the head with a million dollars?” Ya, we thought there would be a few of you who have. Fortunately, an investment in solar might do just that! As a solar developer we’ve starting exploring a brand new solar opportunity that may help you get that smacked over the head “million dollar” feeling.
In the most recent Tax Cuts and Jobs Act of 2017, the federal government created a framework that has created a “money cannon” called Opportunity Zones. The provision offers tax benefits to equity investors that put money into any of the 8,700 designated opportunity areas. So far, a lot of the attentions for Opportunity Zone Funds have been primarily focused on real estate, but we believe the market is overlooking the most natural fit of all the investments out there, Renewable Energy.
Renewable energy developments, particularly solar, are long-term, place-based investments with predictable returns, that enhance a locations affordability and investment value. Projects have to pass the two tests that qualify a property for QOZ (qualified opportunity zone) funds.
Projects have to add substantial improvement increasing the value of the property significantly compared to the pre-investment value.
Projects also need to obtain 50% of gross income from business in the zone
Louth Callan is actively working on developing a number of small utility scale solar as well as community solar projects in QOZs across the United States, but there’s still a lack of understanding over how significant this opportunity truly is for the industry.
If you’re an independent developer or you’re managing an opportunity zone fund looking to invest in solar projects, contact us firstname.lastname@example.org.