Master Limited Partnerships and Real Estate Investment Trusts: Opportunities and Potential Complications for Renewable Energy

Feldman, D. ; Settle, E.

关键词: MLP;    REIT;    MASTER LIMITED PARTNERSHIP;    REAL ESTATE INVESTMENT TRUST;    PUBLIC FINANCE;    TAX EQUITY;    PUBLIC CAPITAL;    PROJECT FINANCE;    SOLAR FINANCING;    SECURITIZATION;    PRODUCTION TAX CREDIT;    INVESTMENT TAX CREDIT;    TREASURY 1603;    Energy Analysis;    Integrated Applications;   

DOI  :  10.2172/1110461
RP-ID  :  NREL/TP-6A20-60413
PID  :  OSTI ID: 1110461

学科分类：能源（综合）

美国|英语

来源: SciTech Connect

【 摘 要 】

Master Limited Partnerships (MLPs) and Real Estate Investment Trusts (REITs) are two proposed investment vehicles which have the potential to lower renewable energy assets' high cost of capital; a critical factor in the Department of Energy's goal for renewable energy to achieve grid-parity with traditional sources of electric generation. Due to current U.S. federal income tax laws, regulations, and administrative interpretations, REITs and MLPs cannot finance a significant portion of the cost of renewable energy assets. Efforts are underway to alter these rules by changing the definition of 'real property' (REIT) and 'qualified income' (MLP). However, even with rule changes, both investment vehicles have structural challenges to efficiently finance renewable energy assets. Among them are 1) effectively utilizing the U.S. federal income tax incentives; 2) administratively structuring the investments to not be overly onerous or complicated, given the potential for pooling a relatively large amount of small assets; and 3) attracting and retaining a large enough investment community to participate in the funding opportunities. This report summarizes these challenges so that if proposed federal changes are made, stakeholders have an understanding of the possible outcomes.