Dan Lynch Quoted in SparkSpread on Outlook for Battery Storage Market amid Possible Tax Credit
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Akin Gump corporate partner Dan Lynch has been quoted in the SparkSpread article “Sector Analysis: A Biden Battery Boost is Being Priced in by Investors.” The article reports that hopes are high that federal incentives for standalone battery storage will soon be a reality.
If President Biden’s budget is passed, the article says, it would expand the solar investment tax credit (ITC) to include storage beginning next year. Under current law, SparkSpread reports, batteries can only benefit from the ITC if they are charged by a renewable energy system 75 percent of the time, which leaves out most standalone batteries that are powered by various sources.
The article notes that battery M&A investment is one way to account for a new tax incentive. This can be done either through the buyer paying a premium for the possibility of a federal benefit being put in place, or the two parties agreeing to split the benefits of an ITC when it is put into place through an earn-out.
Structuring those deals, though, is complicated, said Lynch, who focuses on renewable energy transactions.
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