Solar Tax Equity Investment Opportunities with MSL Group
MSL Group Offers Investors Direct Access to Solar Tax Equity Investments (ITC)
MSL Group offers solar tax equity investment opportunities to qualified investors (C-corporations, high net worth individuals, family offices, etc.). We originate, structure, fund (as project sponsor) and manage solar assets that we develop, which means that investors can efficiently access solar tax credits directly, thus avoiding costly financial intermediaries such as large investment banks and brokers.
The unique feature of our opportunity is that we provide access to non-utility scale solar tax equity investment opportunities – commercial and industrial and affordable housing solar projects.
Solar tax equity investors can realize returns which are materially higher than average yields on risky fixed income securities or divident yields of preferred equities . For example, the yield to maturity (internal rate of return) on a solar tax equity investment, which involves very low capital risk, is substantially higher than the yield on high-risk corporate debt securities.
MSL Group Partnership with Cherytree Group
MSL Group is partnered with Cherrytree Group. Cherrytree manages tax credit funds which provide tax credit investments for investors seeking to monetize renewable energy tax credits such as the solar Investment Tax Credit (ITC).
MSL Group has developed and built rooftop solar arrays in Milford, Connecticut that produce electricity which is utilized by the Milford Redevelopment and Housing Authority (“Milford Solar”). The Milford Solar project generated $264,815 in Investment Tax Credits (“ITC”) and $1,080,273 in depreciation and will generate energy of approximately 1.311MW of energy over the useful life of the project.
Separately, Cherrytree and the MSL Group teamed up on a solar project in Manchester, Connecticut. The Manchester Solar project provided $1,017,990 in Tax Credits and also depreciation of $2,225,892 and will generate total energy of 0.32MW.
In 2020, Cherrytree is contracted with MSL to invest in 5 solar projects located throughout Connecticut that are expected to generate a combined total of $1,491,516 in Tax Credits and an estimated $4,827,349 in depreciation. These solar projects are expected to generate energy of 1.032MW. The total Connecticut Solar Portfolio comprises $2,774,321 of tax credits and $8,133,514 in depreciation which shows the advantage of investing in these tax credits. The total amount of energy produced by the Connecticut Solar Portfolio is 2.663MW.
Contact Ext. 277 for a consultation and list of currently available solar tax equity investment oportunities.
Solar Tax Equity Investment – How it Works
Solar tax equity investment usually range from 6-7 years. MSL Group offers direct access to investors with federal tax credit appetite who are seeking high returns. Unlike large investment banks, we pass the full value of the ITC directly to tax equity investors. MSL Group therefore acts as a Fintech disruptor – eliminating costly financial intermediaries.
There are four income sources for tax equity investments in solar projects:
1. The Solar ITC (Investment Tax Credit)
2. Accelerated depreciation (MACRS)
3. Operational cash flows (also known as the “tax equity skim”)
4. An exit payment to the investor when it divests from the partnership, after monetizing the tax credit
The investor can claim the ITC following the Commercial Operation Date (COD), with over 100% of invested capital returned in year one. Note that IRS rules allow solar investment tax credits to be applied over a twenty year period.
The total return profile of solar tax equity is, in most cases, materially higher than other tax-advantaged investments such as LIHTC. The risk profile of solar tax equity investment is very low (because of the forbearance clause related to the debt financing).
