Inflation Reduction Act Tax Trends Begin to Take Shape

This episode is sponsored by KPMG

More resources from KPMG:
Transferable Tax Credits
Energy & Chemicals

It's tax season, so it's time to once again hear from Lauren Collins, a partner at the law firm of Vinson & Elkins.  Lauren has become a regular guest on this podcast as she stops by about once a year to share her insights on all the tax issues related to the Inflation Reduction Act. During our conversation, Lauren touches on an array of specific topics, including:

• Domestic content credits 
• Direct pay
• Transferable tax credits
• Energy community credits
• Credits related to hydrogen production
• And much more...

If you want to learn more about which tax aspects of the IRA are off to a great ... and which aspects might be stumbling out of the starting block, give this episode a listen.

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Transcript

(Note: This transcript was created using artificial intelligence. It has not been edited verbatim.)

Sean McMahon  00:00

This episode of the Renewable Energy SmartPod is brought to you by KPMG. Transferable tax credits granted by the Inflation Reduction Act have faced delays and challenges in implementation, particularly in the renewable energy sector. Despite these obstacles, there are opportunities for companies to monetize credits and contribute to the growth of the renewable energy industry. KPMG’s experts understand your business and can help you prepare for the future. To learn more, visit kpmg.com/us. That's kpmg.com/us or click on the link in today's show notes. 

What's up everyone, and welcome to the Renewable Energy Smart pod. I'm your host, Sean McMahon. And I got to say, it feels darn good to be back. This show has been on a little bit of a break while I tended to a medical situation within my family. But we're back now and ready to get rockin. And if you take a look at the calendar, our return just happens to coincide with tax time here in the US. So what better time to welcome back to the show Lauren Collins, a partner at the law firm of Vinson and Elkins by now. I hope Lauren's voice is familiar to you because this is the third time she's been on this show. I think she's the first guest to make three appearances. And there's a good reason for that because Lauren and the team at Vinson and Elkins are pros when it comes to explaining all the tax aspects of the Inflation Reduction Act. I'm excited to chat with Lauren. 

But before we hear from her, just a quick look at the upcoming schedule for this show. The American Clean Power Association's annual CLEANPOWER conference is taking place next week in Minneapolis. And in conjunction with that event. We're going to be checking in with Adam Bernardi from Burns and McDonnell. CLEANPOWER is a fabulous gathering that takes place every spring. So it's the perfect time to sort of take inventory on where things stand in the renewable sector. So that's exactly what Adam and I are going to do. And I look forward to hearing his insights about trends that are shaping the industry. 

Looking a bit further ahead. ACP’s Recharge onference, which will focus on batteries, is going to be held in June, right here in my neck of the woods, Portland, Oregon, so you better believe we'll be bringing you insights from that brand new event. 

So there you have it. Lots of great episodes on the horizon. But right now, let's get things rolling with Lauren Collins. 

All right, everyone, and welcome back to the show. As I mentioned, my guest today is Lauren Collins, a partner at the law firm of Vinson and Elkins, Lauren, you’ve become quite a cagey veteran when it comes to making guest appearances on this show. So how're you doing today?

Lauren Collins  02:59

Well, Sean, thanks for bringing me back. And good to see you and talk to you. Lots to talk about in the IRA around taxes. So this is a good time to do it.

Sean McMahon  03:10

Yes, indeed. It's great to have you back. So let's dive right in. What are some of the biggest news items or hottest topics right now, when it comes to taxes and how the IRA is being implemented?

Lauren Collins  03:21

I mean, you hit at audit, that is the biggest topic, how is it being implemented? And that is what people are really talking about most these days is? Is it working? You know, we're almost two years out from when it was first passed. So I think people are starting to determine, you know, what's working? Well, what's not working? Well, on that topic. We're seeing lots of great movement in domestic manufacturing, lots of deals in that space, say lots of solar and wind and storage, great financing there. And then we're also seeing areas where things aren't working so well. And there's been a little bit more hiccups. The other big piece of the pie is we're finally starting to get into kind of a first tax year cycle. So people are starting to claim these Ira tax credits, and figuring out how do you do that, like, how do you actually do it on the visible tax return form? Those forms were published a few months ago, and, and people are asking, what boxes do I check? What number do I put in? How do I file it on what timeline? And then the other thing is, how do we register because it's the new part of the IRA is that in order to do transfers or direct pay, you have to kind of pre register, kind of a weird idea for tax credits, not something that you really had to do in the past. So that portal got opened up a few months ago. I think the early numbers were like 45,000 facilities being registered. That was months ago. So that number is definitely much higher. So far. I don't think the portal is crashed, which is an accomplishment in and of itself. And people are starting to get their numbers issued to them after registering. So we're seeing these transfer deals and direct pay actually be effectuated, you know, so that this full cycle of what's happening in the IRA is kind of coming to fruition and folks are figuring it out.

Sean McMahon  05:23

That sounds great, a lot of excitement in the industry. And I want to come back to direct pay in a minute. But you kind of said, there's certain aspects of this whole, you know, ginormous puzzle that people are trying to sort out, you said, there's certain aspects that are enjoying some momentum, and others that are kind of maybe going through growing pains or just kind of stumbling to the starting block. So can you give us a couple more examples, or maybe just expand on that a little bit more,

Lauren Collins  05:44

ya know, I'll hit on the domestic manufacturing a bit more, because it deserves the airtime. You know, there's really kind of two benefits for domestic manufacturing and Ira. One of them is on the manufacture side. And that's the 45x manufacturing production tax credit. It's basically if you're manufacturing a clean energy component in the US, you get a credit for each component that rolls off the factory line, basically, we're seeing lots of 45x momentum, we have clients that have onshore operations, and are working to build factories in the US as we speak, in large part because of this 45x credit. So we're seeing people who have facilities up and running, generating 40 buybacks, sometimes they're selling those credits to third parties. So we're seeing those transfer transactions take place. And frankly, a lot more of those than I would have anticipated. I'm doing way more 45 Eckler, than I thought I would when Ira first came out, but they're great deals pretty efficient. The players in the market are very excited and working well together. And then you know, we're also seeing people who are setting up new factories in the US who need financing. So there's a lot of debt financing going on. Sometimes the credits are part of the underwriting package, which is where I come in to help advise, but you know, real tangible work happening in the US directly related to Ira 45x credits. Very, very cool thing. On the flip side, you have a credit for the purchaser of all these components, and it's actually developing projects in the US is kind of commonly referred to as the domestic content bonus or adder. This is basically a credit that you get on top of an otherwise available tax credit. So if you're able to prove out you meet this domestic content manufacturing thresholds, then you get this additional, it's like a 10% additional credit on top of what you would otherwise get. This one's a little bit harder, we're still seeing folks qualify for it and work really hard to make sure that they comply with the rules. But the rules are pretty strict. And the way that they're applied is still somewhat unclear. We have some early guidance from the Treasury. But we're waiting for more detailed guidance. And we're hoping that there's some some ways in which that those rules become a little bit easier to apply. If we are able to get this guidance that comes out that helps folks out a little bit more than I expect, we'll see a lot more people comply with the domestic content, bonus rules. And so then I think we'll get just like another good push for domestic manufacturing. That's probably an area of uncertainty. So it's like a 45x is working great domestic content bonus. Not so much. But I think there's still lots of room for improvement and for things to be going better there.

Sean McMahon  08:50

Yeah, I'd echo what you're hearing on domestic content. A lot of organizations I've talked to said, Well, hey, it was kind of a wait to get the guidance. And then now that it's out there, there's just a lot of minutia in there that I mean, sometimes we're disappointed like, hey, we can't do that. And some are like, Hey, we can get close to that. Let's see if we can kind of you know, make it.

Lauren Collins  09:08

Exactly, yeah. And I think folks are hoping that the more kind of robust final guidance will be out like this summer. So this spring, we're seeing lots of wait and see, you know, hoping for for some better word out of Treasury.

Sean McMahon  09:22

Yeah. Me as well. It should move that. That aspect of things a little a little bit faster. Yeah. And then now circling back to direct pay. I think on one of the one of your previous appearances on the show, you talked a lot about that, how that could be a pretty big game changer. What are you seeing there? Sure. Yeah.

Lauren Collins  09:38

And for folks that missed the early, earlier podcast, direct pay, you can just think of it as kind of a grant payment. So a lot of the things that we're talking about an IRA are tax credits, you have to claim them on your tax return. Direct pay, you still claim it on your tax return, but instead of it operating as a tax credit against a tax payment that is due, you get a cash payment from the Treasury Department in the amount of the credit that otherwise would have been available. So it works through the tax code and tax returns. But it's really basically a grant, essentially, this is an area that I really thought would have been much more beneficial than what we're seeing less far. Essentially, it's available for non tax paying entity. So tax exempt entities, municipalities, governments, certain tribal organizations, they are eligible for direct pay. And that makes a lot of sense, because they're generally not tax paying entities. So what the heck do they need a tax credit for? You know, the grant makes a lot more sense. The tough thing there is though, those types of entities aren't natural developers of energy projects. So although it makes sense to do the credit in that way, I think there's been a lot of challenges, and how do we even get the credit, we still have to find out how we're going to develop the project and own and operate it. And that may not be what we're well suited for. So instead, they'd have to enter into more complicated kind of joint ownership structures are leased structures. And that's creating all sorts of additional complexity that folks were not anticipating. And frankly, I haven't seen a good answer for how to fix it. I think people are working really hard. We're certainly working really hard at b&e to help develop those structures and make it work for those types of entities. But it's still very much work in progress, early stages. And then you have direct pay for three credits that really anyone can claim, regardless of what type of entity you are. That's the 45x that I mentioned, hydrogen credit and the carbon capture credit. The idea being these are early kind of stage novel technologies, domestic manufacturing, let's give them a little extra boost and give them the direct pay instead of the tax credit. Again, sounds like a great idea, you'd think that would work great. But thus far, we're seeing a lot of clients that would be eligible to do this elect not to do the direct pay, and instead decide to sell the credits. And there's a number of reasons for that, you know, like I said, we're still kind of in our first cycle of a full tax year and starting to file tax returns, no one really knows that face is gonna go right, you're gonna file your tax return, you're gonna send it in, and then just wait for a check from the government, not known as the most efficient process. So I think folks are just worried and you know, if they'll maybe let other people do it and see how it goes. There's also a timing aspect, that's a long time to wait. In 45x deals, for example, if you do a tax credit transfer, you can get the buyer to buy the credit as the credit is being generated throughout the year. So that's a huge value proposition, right? You're getting paid throughout the year under a transfer transaction, versus having to wait to file your turn, the government's going to issue a check, hopefully, it'll be for the full amount, we won't know, you know, are they going to audit you? There's just lots of uncertainty. So you know what, when you're looking at those two options, a lot of folks are saying, I'm just going to sell the credit, I know what that transaction is going to look like, I know when I'm going to get paid. Yeah, might get paid less than $1 per dollar for credit. But at least there's this certainty. So we're seeing lots of that. And then the final piece is is the financing. If you're financing a project or it's under development, any lender is putting a lot more creatives on a signed up term sheet for a tax credit transfer than just the hope of direct pay. And so again, even though you're losing a little bit of value in the sale, it's probably worth it at the end of the day, if that's how you're going to get your financing to get your project done. We'll be right back.

Sean McMahon  14:12

Transferable tax credits granted by the Inflation Reduction Act have faced delays and challenges in implementation, particularly in the renewable energy sector. Despite these obstacles, there are opportunities for companies to monetize credits and contribute to the growth of the renewable energy industry. KPMG’s experts understand your business and can help you prepare for the future. To learn more, visit kpmg.com/us. That's kpmg.com/us or click on the link in today's show notes. 

And now back to my conversation with Lauren Collins from Vinson and Elkins. Okay, now you mentioned three kind of areas where Are are things are uncertain. So 45x Carbon Capture and hydrogen, I want to dive a little bit deeper into the hydrogen piece because that's a hot topic on the show. Whenever we talk about it, tons of feedback, I want to say I'm speaking specifically to clean hydrogen aspects. What is the tax landscape looking like for that? Seems like there's that every week, I'm seeing something like either a project people were pulling out of a project, because it wasn't where they thought it would be. Or there's uncertainty about the guidance.

Lauren Collins  15:26

Yeah, it's goodness, it's an area again, this we were so excited about, it's such a cool credit, so many cool projects and technologies out there. And then the rag was dropped, and it kind of had all of the things we feared it might, you know, it's, it makes it really hard for a lot of projects to qualify. And we could spend hours arguing about whether that's right or wrong, or, you know, good policy, that's well above my head and pay grade. I'm glad I don't have to make those decisions. But I can say with certainty that it's making things hard for projects to qualify, there are certainly plenty of in development projects that have not been able to find a good path.

Sean McMahon  16:15

So what are some of the major things I'm not gonna ask you like, what makes good policy? And what doesn't? But yeah, or two or three of the things that yeah, when it was included? Clients are like, oh, you know, kind of deflates their bubble or pops their bubble? I'm mixing up my euphemisms.

Lauren Collins  16:31

Yeah no, there's kind of three things that people point to, there's these requirements, basically, that you have to match, the energy that you're claiming is the clean energy use to produce the hydrogen with the hydrogen actually produced. And the way that you have to do that is through these environmental attributes, certificates. And you know, at USC, you have to make sure you have all these certificates, there's a whole process for getting them they need to be registered, you have to match them over a time period. So for the first few years, they give you a bit of a pass. And they say that, as long as they're generated within the same year, you can count them for purposes of determining how clean the hydrogen is, that's going to transition to hourly matching. So you know, you're gonna go from annual, which seems kind of doable, you know, you as long as you have enough of these environmental attributes or tickets for the year, you can match them up for the hydrogen generated that year, then we transition to hourly. And so for each hour of hydrogen generated, you have to have the environmental attributes certificate to match it. Tough, right? You don't, you don't need to be an expert to kind of see how that might be kind of hard to do. The next thing is originality, where you also will need to make sure that the energy generated which is proven by that certificate is within the within the same region that you're in those regions that you can kind of see them on a map, you know, Google edit, it'll come right up. It's not intuitive, or at least it wasn't to me, but But there's certain regions in which you're located. That's where the the energy needs to come from. And then the last is what they call kind of additionality. Basically, you need to be getting your energy from a new project, you can't like be procuring these environmental attribute certificates for projects that have been around forever. They want it to be, we're talking about green energy, or green hydrogen, solar and wind projects that are newly coming online, and you're using the energy from those projects to generate your clean hydrogen. So you can't just use old projects, they want you to really kind of have it be the reason that their project was created. So again, you have time issues, you have location issues, and you have this additionality issue. That is kind of like the three pillars. Each one of them's pretty hard to meet. And, you know, whether we get there, I am not as optimistic as I was, when the hydrogen credit first came up.

Sean McMahon  19:04

Does it seem like that's just gonna take out some of the, I mean, for lack of a better word, smaller players? You know, I didn't notice this. There's some of the even I think Chevron weighed in on the project in Utah. Is that just where that's all going to fund them out? Because they have the, you know, the size and the whatever? The workforce, the experience and all the projects to do this?

Lauren Collins  19:22

Yeah, I mean, you would think just just figuring out how to comply is a giant pain in the ass and takes a lot of resources. And so you have to imagine that there's people looking at it and, you know, is it worth it? You know, is it worth it to develop our project under these pretty stringent requirements? And then, you know, all the other things, just the actual practical risks of developing a project is just added complexity and time and resources that may tip in favor of not going forward.

Sean McMahon  19:55

Yeah, gotcha. So I want to pivot right now to the Treasury Department's Energy Community guidance. What are some of the main takeaways you're seeing from how that's being implemented.

Lauren Collins  20:03

So I mean, this is an area that at least in terms of credits being generated, super successful. I mean, I feel like half of the deals I work on has an energy community bonus included in it. And turns out a large portion of the country is an energy community. Some of it makes sense, right, a lot of times where even clean energy projects are being located, or areas that are in these, like defined energy communities and, and for folks that that aren't super familiar with it, similar to the domestic content bonus, the Energy Community bonus is a bonus credit, if you get an added 10% credit. Usually, if you're located in one of these energy communities, the idea being we want to revitalize communities that were traditionally focused on fossil fuels, oil and gas, or that were brownfield sites. That's another way to qualify him by bringing in these, you know, new clean projects, we're going to revitalize the economy in the area and bring in clean energy. Cool idea, right. And that does seem to be working. A lot of people got lucky, right? The Energy Community bonus was enacted, and they just so happened to have developed a project in an energy community. But that's, yeah, that's okay. So they got their bonus. And then now we're seeing people who are deciding where to develop new projects, make decisions based off of, well, hey, if we do it over here, when an energy community, we're gonna get this bonus versus over here, and we don't. So it is driving decision making.

Sean McMahon  21:41

Okay. And then also, when it comes to energy tax credit transfers, these have been rolled out now pursuant to the IRA for about 18 months or so. So any lessons learned from you know, where that corner of the market is going?

Lauren Collins  21:54

Yeah, you know, it was it was interesting, beginning of last year, pretty slow, you know, not a ton of interest, let's just say lots of interest, not a lot of activity. And then the regulations came out. And people were slowly kind of ramping up and, you know, dipping their toe in the water. And then we got to the end of the year, and people were like, Oh, my goodness, we're gonna close all these transactions. And so, you know, q4, last year, very busy in the tax credit transfer space. You know, I think here at Vianney, we got about a billion dollars of transactions done. We're just one shop, right? So multiply that by all the other big law firms and people doing stuff on platforms, we're talking about many billions of dollars of tax credit transfers. So that is off to the races. This year. Similarly, it was a little slow at the beginning of the year, as we moved into the end of q1 things have ramped up. And I'm seeing activity be pretty consistent since then. So we've definitely surpassed that, that billion dollar mark. And things are, you know, starting to develop, I think we're starting to see some more market terms. The way that the agreement look is, is starting to be a little bit more consistent. Early on, you'll see some tax credit transfer agreements that were like five pages, and then you'd see some that are like 60 pages. And I think the markets call us around like a 30 page ish document, give or take for some exhibits, you know, the types of reps that are being given are starting to kind of be a little bit more standardized, you know, big areas where there's still kind of commercial negotiation is just what the indemnity looks like and how big the cap is, is the seller covering you for the full value of the credit, or just what you paid them, which is always going to be less than the value? And are they covering you for the penalties and the interest and the contest costs in the event? There's a challenge. That's all commercial negotiation, often dependent on the credit quality of the seller, potentially the relationship of the parties, and how kind of safe the credit is. And then another area that we spend a lot of time on in negotiating these these deals is tax contest. And again, it's if I know you, like so boring,

Sean McMahon  24:20

tax contest. Spelling Bee for tax attorney.

Lauren Collins  24:26

I know, I know, this is IRS, tax attorneys just nerd out but it's basically like what happens in the event of an audit and like heaven forbid if it goes to trial, who's in charge who gets to make the decisions, who the attorneys are being hired, who's paying for what all of this is really heavily negotiated. You know, I think it's probably an area of an agreement that most business folks probably just like skim past, but because we have new entrants to the market and we now have in some cases like a tri party agreement, where you have a developer, potentially a tax equity investor, and a tax credit buyer, and then maybe even up tax credit insurance, you now have like four or more people who all have an interest in what happens if this credit is challenged. And so there's just a much more intense focus on these provisions. Plus, you don't really know what happens if there's an audit, you know, is the IRS going to audit the buyer and the seller every time it kind of remains to be seen. So lots of focus on that has kind of reinvigorated my interest in all of the partnership audit rules shouldn't invigorate your interest at all, because it is kind of boring and stale. But that's what tax attorneys are for. Okay,

Sean McMahon  25:50

Yeah, I'll try not to envision like a spelling bee for tax attorneys are suffering. Yeah, so obviously, you mentioned that you and the team at Vinson and Elkins, you know, involved in tons of deals, right. So you're interacting with loads and loads of clients, any details from any of those deals that you're able to share that you think might be indicative of where you know, where things are headed for a wider market?

Lauren Collins  26:11

Yeah, I mean, one of the areas that that's hot, and it feels like there's something in the news every day is just offshore wind, we've done a number of deals, some public deals where stone peak has acquired interest in offshore wind projects, we've also represented a gap in the acquisition of some interest in offshore wind projects. Those are all public, huge deals, you know, these are 1000 megawatt projects, giant cheque sizes, you know, they, and that's why they require, you know, multiple investors who are capable of writing the kinds of checks that you need to develop an offshore wind project. So as you can imagine, they're they're very complicated deals, very intense structuring going on. But you know, despite that onshore wind still kind of the Wild West, right? It's in the US anyway, you know, it's been going on in Europe forever. But, you know, how that market looks, how the electricity is going to be sold, what kind of certainty we have of returns, lots of unknowns there. So, you know, obviously, I can't share the particulars. But, you know, I can certainly say, when you're in those deals, negotiating or thinking through all of the different potential issues, do you need like a whole matrix, right? If like the regulatory risks, the off take risks, the the casualty risks, not to mention the tax credit risk, right come in, but you know, lots of things to think about, you know, and then there's days like you have these trade deals going on. And then just on Friday, we hear that New York basically canceled permits for three of their offshore wind projects and development, seems that was driven by GE basically deciding not to manufacture the size of wind turbines that were going to be needed for those projects. So, you know, it's like two steps forward, one step back or whatever. Suffice to say, it's kind of a crazy area. There's been some wins, but probably just as many losses in that space. So another area where lots of uncertainty and not so clear, how big of a piece the offshore wind space is going to play in the energy mix going forward. Yeah,

Sean McMahon  28:34

I share the just a concern, I guess, I don't know, the Wild West is a good way to put it. I just feel like sometimes. And this is me speaking. Not Lauren. But like, I wonder if we can get big things done anymore.

Lauren Collins  28:46

Yeah. And I will, I will get that, you

Sean McMahon  28:50

know, and it's not supposed to, you know, yeah, I just look at anything big. And again, speaking of the US like, right, do we get do we do we make big things? Do we build big things anymore? Like I'm not sure.

Lauren Collins  29:01

So like I said, we've got the deals done, right. Like the players are there are ready to do it, you know, have the expertise have the capital, and are working together to do it. But yeah, I agree with you. It seems like there's just too many challenges, the regulatory the permitting the offtake. You know, that's out of their hands.

Sean McMahon  29:22

Yeah, I put it in the same bucket as transmission. Right. These are big things. It's so many parties have to come together and multi year vision and implementation and build out. It's like, well, we see our transmissions going and how the backlog? Yeah. So certainly back again, to kind of your interaction with clients. You know, when we look at things like direct pay and tax credits, what kind of questions are you hearing from them? I mean, I just spend a few minutes voicing my concern about things but obviously, you know, folks might be concerned about all the things you've laid out there, you know, interest rates, regulatory, I mean, even political risk these days. I mean, we got an election coming up, things like that. So, what are some of the things that your clients are coming to you with? Like, how do I protect myself from? Like you said, this matrix of things like, what are the two or three things you hear the most from from clients?

Lauren Collins  30:11

Yeah I mean, you hit on it right at the end. But the political risk is one for sure. I always feel like I'm not the best person to answer that question. without bias. You know, having been a tax credit lawyer, I've bought into the IRA. And I will admit that, and I don't see that there's a big risk, even if there's an administration change in the fall, or Congress turns over I, I don't think we're going to lose the IRA, I don't think that there's going to be an unwind of this, you know, historic piece of legislation doesn't seem like it's going to happen to me at all. I don't even think that there's like specific areas in the tax code that are at risk, where there may be some risk or chance for implementation to be tougher is just the Treasury guidance, you know, the Treasury Department is operates in Washington. And not to say anything bad about them, they I know, they work very hard. But of course, if there's a change in administration, the way in which rules are implemented would likely change. So those rules could be harder, or they could push in one direction or the other. That is an unknown. And so people are worried about that. The way that you kind of deal with it is not the greatest answer. But it's kind of the ability to renegotiate or retype terms or reopen an agreement, if there is that type of change to the way that the rules are written, that tries to put the parties back to the same place best that they can. And again, I don't think we're going to see any sort of sweeping changes, but the types of changes I would expect would be more administrative, maybe it's harder to comply, but you don't lose the credit entirely. But that is a big fear that that people have that you try to address as best you can. There's some sort of contractual protections.

Sean McMahon  32:03

Alrighty Lauren, as I mentioned, at the top, you've been on the show a few times, and you're always really good at kind of, you know, looking into the future and see what we're gonna be talking about, and say, 12 months from now. So I'm gonna ask you that question again. When you and I reconnect a year from now, and we're talking about the IRA and tax credits and everything having to do with the energy transition? What are we gonna be talking about? What's gonna be the hottest topics in 2025?

Lauren Collins  32:24

Well, I hope we're talking about all the way we we've solved the issues we've talked about today, you know, I hope we find a way to get tax exempt and governmental entities, the ability to unlock direct pay, you know, that I feel like that it's there, like, we can do it with enough momentum. And with enough smart people thinking about it, I think there's opportunities there that that we will unlock, and then you'll have solar panels on the top of you know, every carport and every university roof, that'll be great. We're going to be talking about transferability, for sure. You know, that's just gonna continue to be the biggest driver here. And one of the things that we didn't get into is, I think we touched on a little bit. But these hybrid deals where you have both tax equity and transfers, that's a piece of the market that is just now kicking off. And a year from now. It'll be fully rolling. And they'll probably be some public deals we can talk about, and that'll be kind of the other missing link of how we get tax credit deals done. So I think there'll be lots more to talk about there next year.

Sean McMahon  33:34

Okay, well, I'm looking forward to that. Once again, Lauren, I appreciate your time. It's always great to have you on the show.

Lauren Collins  33:39

Thanks.

Sean McMahon  33:45

That's our show for today. But before we get out of here, I want to say one final thank you to the exclusive sponsor of today's episode KPMG. Thank you all for listening. And if you haven't already, please subscribe or follow this show on Apple, Spotify, Google, or wherever you listen to your podcasts. And as always, please be sure to share it with your friends and colleagues. Have a great day.