What is the product?

AIG provides coverage for tax credits available for investments in eligible renewable energy projects, including, but not limited to, solar farms, wind turbines, fuel cell power plants, and carbon capture practices.

 Such credits include: 1) Investment Tax Credits (ITC) which are designed to partially compensate taxpayers for the cost of installing renewable energy systems; 2) Production Tax Credits (PTC) which are per kilowatt-hour (kWh) tax credits for electricity generated by qualified renewable energy resources; and 3) Sequestration Tax Credits (45Q), which are available to taxpayers that capture and store, or use carbon dioxide and carbon oxide. AIG can provide 7-year to 10-year coverage for such policies.

How does it support green outcomes?

Renewable energy tax credits incentivize clean energy in the U.S., and tax insurance further facilitates investment in renewable energy projects. Generally, project developers cannot utilise tax benefits generated by renewable energy projects and instead partner with companies with tax appetite to more efficiently monetize the benefits (tax equity investors). Tax insurance in turn helps developers secure investments from tax equity investors who would otherwise require an indemnity for certain risks relating to the tax credits.

How does it enable customers today?

AIG insured the developer of a renewable energy project that was seeking an investment from a tax equity investor that would entitle the investor to tax credits. However, the investor wanted a credit-worthy party to provide a 10-year indemnity for certain risks relating to the tax credits.

AIG underwrote the complex tax risk and enabled the developer to secure an investment from the tax equity investor and proceed towards completion of the renewable energy project.