Hoosier Banker 21 can build a portfolio of solar tax equity investments that provide a meaningful, annual benefit. Supporting Community Banks KeyState has been facilitating solar tax equity investments by community banks since 2019 when it formed KeyState Renewables and launched the SOLCAP tax equity fund platform. To date, SOLCAP has raised and deployed $275 million in tax equity, financing 53 projects across the U.S. SOLCAP’s typical investors are community banks with $2-$25 billion in assets. Nearly all the banks invest annually to establish a recurring, annual earnings benefit for their institution. To help community banks comply with the regulatory and accounting requirements for solar tax equity investments, KeyState offers comprehensive underwriting packages, provides financial and GAAP models, and serves as the fund asset manager, providing quarterly updates on investments. This support helps community banks confidently navigate solar tax equity investments. Expansion into Renewable Energy Lending As community banks gain familiarity with renewable energy project finance, many are seeking to expand their involvement beyond tax equity investments. They may explore opportunities to provide construction and permanent lending for small and mid-size solar projects. Programs like REAP offer government guarantees for rural project loans that meet specific criteria. The recent announcement of the Empowering Rural America (New ERA) program further incentivizes developers to build rural projects that community banks can finance. Embracing the Renewable Energy Industry Community banks have a remarkable opportunity to participate in and benefit from the fast-growing renewable energy industry. By diversifying their financing platforms and supporting the transition to clean energy, community banks can align with their communities’ sustainability goals while generating long-term economic benefits. The renewable energy financing landscape is undergoing a transformation, with community banks playing an increasingly vital role. Through tax equity investments and renewable energy lending, community banks are capitalizing on the opportunities presented by the expanding renewable energy sector. KeyState is committed to supporting community banks as they navigate and expand their renewable energy financing initiatives, positioning them as key contributors to a sustainable future. HB KeyState Captive Management LLC’s bank captive program is endorsed by the Indiana Bankers Association. While the KeyState solar tax equity investment program is not endorsed by the IBA, we believe it is a valid opportunity for consideration.
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