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Earlier this month, Crux \u2014 a finance technology company that connects tax credit buyers and sellers \u2014 launched a debt capital marketplace<\/a> for clean energy developers and manufacturers to more easily access financing.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Johnson said he hasn\u2019t yet seen investors or lenders pulling back from the clean energy sector in response to recent uncertainty. \u201cThe levelized cost of energy from clean sources is as competitive, or more competitive than others,\u201d he said. \u201cAnd so companies are making corporate business decisions to solve the needs of more energy demand and the need for domestic components \u2014 they’re making those decisions irrespective of any views that they may have, politically or otherwise.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Those decisions require capital, Johnson said, and \u201cwe’re seeing more of it flow than we’ve ever seen before.\u201d\u00a0<\/span><\/span><\/span><\/span><\/span><\/span>Lenders in Crux\u2019s network have already issued more than a billion dollars worth of term sheets, he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n A February report from consulting firm Grant Thornton said an anticipated \u201cswoon in the oil and gas industry \u2026. hasn\u2019t materialized and doesn\u2019t look likely in the near future,\u201d and reported that merger and acquisition interest in the renewables sector had been \u201clukewarm\u201d even before the November election, but offered a strong overall outlook.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cAs most regulations are finalized under the IRA, and the technology-specific credits have transitioned to being technology neutral, we do not believe the new administration will ultimately take action to repeal the full suite of credit benefits,\u201d the report said. \u201cHowever, there could be impacts to individual credits.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n If the IRA stays largely intact, its credits will \u201cmake renewables an attractive option for M&A even though demand hasn\u2019t accelerated as rapidly as expected,\u201d said Grant Thornton\u2019s report. \u201cThis subsector\u2019s momentum and profitability have fallen somewhat short of predictions in recent years, but energy production from renewable sources is widely expected to rise in the coming years, with dramatic increases projected over the long term.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Even without the backstop of the IRA, \u201cmany projects stand alone and have a good return on investment irrespective of whether one uses the investment tax credit program or not,\u201d said Molotsky.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cWhile it is likely that [the ITC] will be reduced or eliminated for offshore wind, [electric vehicle] chargers and EVs themselves,\u201d he said,\u00a0\u201cthe other programs that use ITC would more fall within an all of the above energy strategy and should continue to be safe to rely on and utilize on a go forward basis.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Molotsky noted that states like Texas have already deployed enough clean energy to create significant momentum in the sector. He pointed to the Electric Reliability Council of Texas\u2019 record-setting wind, solar, and battery storage deployment this month, and the fact that on March 2, \u201cwind, solar, storage, and nuclear met over 75% of ERCOT demand.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n But some new financing will be \u201con hold until the market gets a clearer picture of what parts of the [IRA] Congress will roll back,\u201d said Keith Martin, partner and co-head of projects at Norton Rose Fulbright.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cThe market is financing projects that were already under construction going into this year,\u201d Martin said. \u201cA \u2018safer bet\u2019 project is a project that was under construction in 2024. Such projects are entitled to claim tax credits under the 2024 tax code, provided they\u2019re completed within four years.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n DeCotis said he\u2019s \u201cless pessimistic than most people\u201d about the fate of the IRA\u2019s tax credits thanks to the U.S.\u2019s recent increase in demand for energy,\u00a0particularly electricity.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cRegardless of the change in policy, the need for infrastructure investment remains, much of which is provided for via the IRA,\u201d he said. \u201cSo I would expect there to be some tweaking around the edges, and where Congress could claw back some money, they might \u2014 but I don’t anticipate it to have a significant impact on the investment dollars that will float energy infrastructure. Because if it does, then we risk energy shortfalls, we risk blackouts.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Correction: This article has been updated to correct the name of the law firm where Brad Molotsky is a partner.<\/p>\n<\/div><\/div>\n