Seeking tax credits for renewable energy work?
| Organization: Renewable energy components manufacturer | Need: Tax credit opportunities to help fund rapid expansion | Outcome: Obtained $150,000 tax credit |
Understanding the situation
CLA provided buy-side due diligence for a renewable energy components manufacturer in August 2022, and since then, company growth has been rapid. The new owner invested heavily in the business — including plant expansion and automation — and is on track to triple revenue since the acquisition.
During this period of rapid growth, we weren’t aware of this opportunity, and we’re grateful to CLA for bringing it to our attention. — President and CEO, renewable energy components manufacturer
Being so busy left the owner little time to investigate tax credit opportunities. CLA thought the business was an excellent candidate for the Advanced Manufacturing Production Section 45X Tax Credit, and proactively brought it to the owner’s attention.
Exploring the challenge
The Section 45X credit is available for producing in the United States various products, including qualifying solar and wind energy components, battery components, inverters, and some critical minerals. The key word is “qualifying,” and the old phrase “the devil is in the details” applies here. Diligence is essential when applying for this credit.
The CLA team and owner participated in a collaborative process. CLA:
- Set up a call with the owner to discuss products in the renewables space
- Performed an analysis of the product portfolio to determine which products qualify
- Requested technical design drawings to review schematics
- Ran rough estimates related to annual production volume
Achieving results
The manufacturer received a $150,000 tax credit, which will help the company expand its workforce and automation efforts.