NC State Renewable Energy Tax Credits Available Through Monarch Private Capital

April 5, 2024
Company Announcements Renewable Energy

Monarch Private Capital (Monarch), a nationally recognized impact investment firm that develops, finances and manages a diversified portfolio of projects that generate both federal and state tax credits, announces the availability of North Carolina Renewable Energy (RE) tax credits following a settlement with the North Carolina Department of Revenue (NCDOR).

Fueled by a generous NC tax credit for renewable energy development, Monarch and its development partners participated in the financing and completion of over $1 billion of NC renewable energy projects between 2012-2016, catapulting NC to the second-ranking state in renewable energy development after California. In 2018, following the completion of these projects, NCDOR challenged investors claiming these credits.

In a recent comprehensive settlement with NCDOR, Monarch secured the commitment by NCDOR to honor all NC tax credits reported by Monarch’s investors. More importantly, for purposes of this news release, NCDOR agreed to allow Monarch to place over $47 million of previously unplaced NC RE tax credits. Judge Adam M. Conrad, who presided over the litigation, granted Monarch the equitable relief it sought and allowed Monarch to place these credits over the years 2024 through 2026. Additionally, Judge Conrad retained jurisdiction in the matter to ensure the terms of the agreement, specifically the placement of the credits and their use by Monarch’s investors, are honored by NCDOR.

The placement of these 2024, 2025 and 2026 NC RE tax credits is unique in many respects. First, NCDOR has agreed to revoke its Important Notice of 2018 and not challenge these tax credits based on the federal principles it was attempting to employ to disallow these tax credits. The only potential challenge to the use of these credits by a taxpayer would be failing to become a member of the entity allocating the credits to them under NC state law (i.e., the credits cannot be sold to investors under NC state law). The federal tax treatment of the allocation of the NC RE credits is now irrelevant. Finally, these NC RE tax credits are not subject to recapture since the recapture period for these credits has long since expired.

The use of the NC RE tax credits is subject to the same limitations of 50% of the taxpayer’s tax liability. A corporate taxpayer may use the credits against either income, franchise or premium taxes. The taxpayer elects annually which tax the credits are applied against. However, to the extent any of the credits cannot be used by the taxpayer because of the 50% of liability limitation, they are still eligible for the five-year carryforward as found in the prior law.

Under Judge Conrad’s order, Monarch has over $24.8 million NC RE tax credits available for placement in 2024. This offering presents a unique opportunity in terms of extremely low risk and high return compared to returns on other states’ tax credits.

“Monarch Private Capital is pleased to offer investors the opportunity to participate in North Carolina Renewable Energy tax credits,” said George L. Strobel II, Partner, Co-Founder, and Co-CEO of Monarch Private Capital. “Our recent settlement with NCDOR underscores our commitment to protecting investors’ interests and facilitating impactful investments in renewable energy projects.”

Investors interested in participating in these tax credit opportunities can engage with Monarch by investing in the partnership entities designated by NCDOR and Judge Conrad as holding these tax credits. Upon investment, investors will receive a 2024 K-1 form, indicating their tax credit allocations. The entity is expected to liquidate at the end of 2025.

For more information on Monarch Private Capital and tax equity impact investing, interested parties can contact George Strobel at gstrobel@monarchprivate.com.

About Monarch Private Capital

Monarch Private Capital manages impact investment funds that positively impact communities by creating clean power, jobs, and homes. The funds provide predictable returns through the generation of federal and state tax credits. The Company offers innovative tax credit equity investments for affordable housing, historic rehabilitations, renewable energy, film, and other qualified projects. Monarch Private Capital has long-term relationships with institutional and individual investors, developers, and lenders participating in these federal and state programs. Headquartered in Atlanta, Monarch has offices and professionals located throughout the United States.

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