By Shane Spencer
EnergyBiz magazine
If you’d like to discuss energy issues, contact Court Rich, Co-Chair of Rose Law Group’s Renewable Energy Department at crich@roselawgroup.com
The sustainability movement faces formidable obstacles to a needed transition to financial stability.
Until now, investment in renewable energy has depended on subsidies from the federal and state governments. But subsidies are not always available, and that makes business models that count on them unreliable for providing renewable energy, yet good for losing taxpayer and investor money.
Meanwhile, treating renewable energy investment as a sale of goods to the utility companies – in effect, a commodity transaction – introduces unneeded risk and volatility. Using a real estate investment trust to invest in renewable energy is a way to alleviate these risks and encourage the investment of a significant amount of money.
A REIT is a subcategory of a corporation whose sole purpose is to own real estate assets. The benefit is that REITs do not pay corporate taxes as long as they distribute 90 percent of their taxable income to their investors. REITs operate in a fashion similar to mutual funds.
