October 28, 2013

Access to financing for wind farms to increase

The U.S. Treasury's Office of the Comptroller of the Currency currently permits national banks and federal savings associations to make tax-equity investments in wind farms in low-income regions that provide a public benefit.

The U.S. Treasury's Office of the Comptroller of the Currency currently permits national banks and federal savings associations to make tax-equity investments in wind farms in low-income regions that provide a public benefit. Last month, federal bank regulators approved guidelines for banks and developers to finance such wind farms under Public Welfare Investment authority, which is the same authority that allows similar investment in low-income housing. According to Paul Holhouser of the American Wind Energy Association, this means over 50 new banks will be able to participate in the tax-equity market, up from the dozen that do now.

“There's an untapped source of funds that we can access,” Holshouser told Bloomberg. “Our goal is to bring in new banks so that tax-equity yields come down.”

The goal of allowing more banks to participate in the tax-equity market for wind energy development will reduce costs for developers, and possibly create a market for current investors to sell stakes to banks. Because they are categorized as beneficial to the public, wind farms can be a great investment in many areas where the economy is doing poorly and jobs are in short supply.