Eyeing Tax Rewards, Big Cos. And PE Firms Back Solar

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Originally published in Law360, January 23, 2012. 

Law360, New York (January 23, 2012, 5:51 PM ET) -- The end of a federal grant system that doled out billions of dollars to solar energy companies may have been a blow to some players in the industry, but still-remaining tax benefits are proving to be a strong enough lure for rich corporations and private equity firms to invest in solar projects, experts say.

The U.S. Department of the Treasury's 1603 Program grants, which died a well-chronicled death at the end of 2011, paid $9.6 billion to support renewable energy projects over three years.

The grant program's demise will make it harder for smaller solar players to finance major projects, experts say, because only big businesses that turn regular, taxable profits can realize savings under the federal tax incentive program, which has at least five more years of life.

Sensing opportunity, companies like search titan Google Inc. and private equity giant Kohlberg Kravis Roberts & Co. LP are making big moves into the world of solar investing. Not only will they realize the public relations glow that comes from investing in renewable energy but they’ll also reduce their tax burdens.

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