Real Estate/REIT
Increase ROI 4 min

Maximizing Clean Energy Tax Credits: A Goldmine for REITs

REITs can now unlock up to $500,000 per $1M invested in tax credits—even without tax liability—boosting solar investment returns.
3PLX Team by 3PLX Team Increase ROI 4 min

Real Estate Investment Trusts (REITs) have a golden opportunity to cash in on clean energy tax credits, thanks to the Inflation Reduction Act (IRA). At 3PLX, we’re helping REITs unlock up to $500,000 in benefits per $1M invested in solar projects—even if they lack the tax liability to use these credits directly. This game-changer is reshaping how REITs approach renewable energy investments.

Historically, REITs couldn’t fully leverage tax credits like the Investment Tax Credit (ITC) due to their low tax profiles. The IRA’s introduction of transferability changes that, allowing REITs to sell credits to corporations with tax burdens, turning solar into a profit center.

How It Works

The IRA offers a base 30% ITC, with bonuses (e.g., 10% for Domestic Content) pushing it to 50% in some cases. For a $1M solar installation:

  • A 50% ITC yields $500,000 in credits.
  • REITs sell these credits at a slight discount (e.g., 90 cents on the dollar), netting $450,000 in cash.
  • No tax liability required—pure profit.

A recent 3PLX-supported REIT project installed 200 kW across a retail portfolio. Costing $1.2M, it generated $600,000 in credits, sold for $540,000—offsetting nearly half the investment upfront.

Rooftop solar panels can bring in hundreds of thousands of dollars for commercial real estate through transferable clean energy tax credits.
Rooftop solar panels can bring in hundreds of thousands of dollars for REITs through transferable tax credits.

Why REITs Should Act

This isn’t just about cash—it’s strategic:

  • Boost ROI: Credits cut net project costs, enhancing returns.
  • Attract Tenants: Solar lowers energy bills, making properties more appealing.
  • Meet ESG Goals: Buyers of credits often prioritize sustainability, aligning with investor demands.

“REITs can now turn solar into a revenue stream,” said JR Mejia, CEO of 3PLX. “Transferability makes clean energy a no-brainer—contact us at 561.800.3559 or info@3plx.net to get started.”

Best Practices

To maximize benefits:

  1. Target high-energy-cost properties for bigger savings and credits.
  2. Use Domestic Content components for the 10% ITC bonus.
  3. Partner with experts like 3PLX to handle transfers and compliance.

The future is bright—stable bipartisan support and growing C&I solar demand (2-3 GW annually) ensure these credits remain a reliable tool for REITs to fund sustainability and profitability.

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