Schneider Electric is investing in a portfolio of Texas-based clean energy projects utilizing a Tax Credit Transfer Agreement for solar and battery storage systems by ENGIE North America.
The deal enables Schneider Electric to decarbonize its Scope 2 emissions when the investor-buyer procures associated environmental attributes as part of the tax credit transaction. The tax credit transfer system outlined in the IRA could streamline the process of getting money to where it is most needed and is a step towards maturity as market participants discover together operating models that can scale, according to the two companies.
ENGIE is a Houston-based low-carbon energy and services company. The two companies have worked together since 2017 to partner on multiple projects. The newly contracted projects are expected to come online throughout 20224, with ENGIE developing, building and operating the storage systems.
“Schneider Electric is committed to achieving net-zero emissions across our operations by 2030. This new solar-plus-storage agreement for the U.S. and Canada with ENGIE, a leading developer of renewables, will help us reach that goal,” Aamir Paul, Schneider Electric president, of North America operations, said in a statement. “The IRA opens the door for innovative projects through its transferability clause, and expands the range of entities that can benefit from tax credits in meeting decarbonization objectives. Schneider Electric is a leader in sustainability, efficiency, and the energy transition, and we are proud to ‘model the way’ with this tax credit transfer.”
The deal is among the first to leverage the TCTA provisions in the Inflation Reduction Act, which included numerous incentives for renewable energy. The law enables tax credit transfers from renewable energy, clean energy manufacturing, battery storage projects, and other clean energy projects.
“This collaboration with Schneider signals a real step forward in accelerating the net-zero transition. The solar-plus-storage portfolio, coupled with the innovative tax credit transfer structures enabled by the IRA, helps expand the opportunities for an increasing set of corporate clients to meet their goals,” Dave Carroll, chief renewables officer, and senior vice president, ENGIE North America, said in a statement. “This approach supports the continued growth of renewable energy and storage options in the U.S., which brings economic opportunities to an expanding set of communities alongside the transition to a lower-carbon grid.”
