Energy Bond Guidance May Unlock Low-Cost Financing Tool


[authors: R. Thomas Hoffmann, Darin Lowder]

Guidance issued by the IRS earlier this week removes uncertainty related to qualified energy conservation bonds (QECBs), and may result in expanded sources of funding for energy efficiency and renewable energy projects.

QECBs have been underused since they were created in 2008, due in part to uncertainty over rules related to energy efficiency improvements and financing for green community programs. With much of the uncertainty resolved, QECBs may become a more attractive financing tool because they can qualify for interest subsidies that could bring borrowing costs to near-zero percent interest rates and terms of up to 21 years.

The IRS guidance provides certainty related to measuring energy efficiency improvements and determining whether a clean energy financing program or other similar community energy conservation strategy will qualify as a “green community program” under the federal tax code. Given the new clarity the guidance provides, states, localities, public housing authorities, energy services companies, and private renewable energy developers may want to take a fresh look at using QECBs as a financing tool for energy efficiency and renewable energy projects.

The attorneys in Ballard Spahr’s Energy and Project Finance Group and Tax Group have substantial experience in the allocation and issuance of QECBs in transactions ranging from simple equipment purchases to complex power generation projects.

For more information, see our Tax alert, IRS Issues Guidance on Qualified Energy Conservation Bonds.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.