This post was updated on February 9, 2017. The original version was published in March 2013.
The three main pillars of competitiveness in the solar industry are the ability to acquire customers at low cost, install inexpensively, and achieve low cost of capital. To realize a low cost of capital, solar developers must often partner with so-called “tax equity” investors due to the structure of federal solar incentives. This paper summarizes the main financial arrangements used for such financing: sale-leasebacks, partnership flips, and inverted leases (which are also called lease pass-throughs).
The examples in the paper are from solar, but many of the same principles apply to the wind industry as well.