Clean Energy Project Tax Credit Buyers: Are You Inheriting Someone Else’s Risk?
Clean Energy Project Tax Credit Buyers: Are You Inheriting Someone Else’s Risk?
Aug 18, 2025
Meeting the Moment: The Compliance Challenge Shaping Clean Energy
Realizse Insight Series, Issue 5 of 7
Transferability Made Clean Energy Tax Credits Liquid—the One Big Beautiful Bill Makes Them Dangerous
The IRA gave us something powerful: the ability to buy and sell renewable energy tax credits. That changed everything. A whole new class of buyers—corporates, banks, institutional entities—entered the market for clean energy incentives.
But now, the One Big Beautiful Bill (OB3) and the July 7, 2025 Executive Order introduce a harsh reality:
Transferable ≠ safe. If the original project failed compliance, you could be on the hook.
You Can Buy a Credit—But You Can’t Escape Its History
Tax credit buyers often assume that their role is low-risk. You’re just buying a pre-approved asset, right? Not anymore.
Under OB3, buyers must verify:
That the credit was eligible at origination
That FEOC (foreign entity of concern) rules were followed
That domestic content and wage bonuses were validly claimed
That proper transfer valuation and chain-of-ownership documentation exists
If that proof doesn’t exist, your credit may be disallowed or recaptured.
Your Exposure: You May Not Know What You Bought
Risk | Impact |
No immutable compliance record | IRS disallows credit, clawback + 20% penalty |
Faulty FEOC or wage compliance | Recapture of entire credit value |
Transfer documentation gap | Legal liability, credit voided |
Bonus claimed without proof | 10%–20% penalty, IRS enforcement |
Project fraud or nonperformance | Brand risk, audit exposure, enforcement action |
Why OB3 Hits Credit Buyers Hard
Credit buyers sit at the end of the transaction chain—yet OB3 extends liability to the buyer if the project they purchased from cannot prove compliance.
This creates retroactive risk:
You may close a transaction in Q1 2026, only to be audited in 2029—and discover the credit was ineligible from day one.
Legal Memos Aren’t Enough
Relying on a seller’s legal opinion, or trusting that the documentation "must be somewhere" doesn’t satisfy OB3.
Buyers need primary, auditable data.
You need to see:
Timestamps showing wage/apprenticeship compliance
FEOC certifications linked to actual procurement records
Digital product passports validating domestic content
Transfer and valuation documentation with verifiable provenance
Audit logs showing continuous compliance from construction to close
If you can’t verify it, you can’t rely on it.
What Tax Credit Buyers Must Do Now
To avoid exposure, tax credit buyers must conduct compliance diligence as seriously as financial diligence.
Require Digital Passports linked to the credit
Demand immutable, timestamped compliance proof
Review transfer, valuation, and bonus eligibility with structured data
Confirm start-of-construction evidence and traceability
Only purchase credits from projects with persistent compliance infrastructure
The Bottom Line: Compliance = Credit Quality
In the post-OB3 world, not all credits are created equal. The value of a credit isn’t just the number on the certificate—it’s the proof behind it. Without that proof, you may own a risk, not an asset.
Coming Next
Issue 6 of 7: Insurers – Can You Underwrite a Risk With No Source of Truth?
About Realizse:
Realizse delivers the trusted compliance and product traceability infrastructure clean energy finance now demands. Our flagship solution, the Realizse Passport, transforms fragmented, unverifiable records into a unified, tamper-proof, cryptographically verifiable system of record trusted by all stakeholders.
By providing audit-ready compliance and product traceability data, Realizse unlocks liquidity, mitigates recapture risk, lowers insurance premiums, and reduces audit cost and response time — enabling faster financing and stronger ROI across the clean energy lifecycle.
Meeting the Moment: The Compliance Challenge Shaping Clean Energy
Realizse Insight Series, Issue 5 of 7
Transferability Made Clean Energy Tax Credits Liquid—the One Big Beautiful Bill Makes Them Dangerous
The IRA gave us something powerful: the ability to buy and sell renewable energy tax credits. That changed everything. A whole new class of buyers—corporates, banks, institutional entities—entered the market for clean energy incentives.
But now, the One Big Beautiful Bill (OB3) and the July 7, 2025 Executive Order introduce a harsh reality:
Transferable ≠ safe. If the original project failed compliance, you could be on the hook.
You Can Buy a Credit—But You Can’t Escape Its History
Tax credit buyers often assume that their role is low-risk. You’re just buying a pre-approved asset, right? Not anymore.
Under OB3, buyers must verify:
That the credit was eligible at origination
That FEOC (foreign entity of concern) rules were followed
That domestic content and wage bonuses were validly claimed
That proper transfer valuation and chain-of-ownership documentation exists
If that proof doesn’t exist, your credit may be disallowed or recaptured.
Your Exposure: You May Not Know What You Bought
Risk | Impact |
No immutable compliance record | IRS disallows credit, clawback + 20% penalty |
Faulty FEOC or wage compliance | Recapture of entire credit value |
Transfer documentation gap | Legal liability, credit voided |
Bonus claimed without proof | 10%–20% penalty, IRS enforcement |
Project fraud or nonperformance | Brand risk, audit exposure, enforcement action |
Why OB3 Hits Credit Buyers Hard
Credit buyers sit at the end of the transaction chain—yet OB3 extends liability to the buyer if the project they purchased from cannot prove compliance.
This creates retroactive risk:
You may close a transaction in Q1 2026, only to be audited in 2029—and discover the credit was ineligible from day one.
Legal Memos Aren’t Enough
Relying on a seller’s legal opinion, or trusting that the documentation "must be somewhere" doesn’t satisfy OB3.
Buyers need primary, auditable data.
You need to see:
Timestamps showing wage/apprenticeship compliance
FEOC certifications linked to actual procurement records
Digital product passports validating domestic content
Transfer and valuation documentation with verifiable provenance
Audit logs showing continuous compliance from construction to close
If you can’t verify it, you can’t rely on it.
What Tax Credit Buyers Must Do Now
To avoid exposure, tax credit buyers must conduct compliance diligence as seriously as financial diligence.
Require Digital Passports linked to the credit
Demand immutable, timestamped compliance proof
Review transfer, valuation, and bonus eligibility with structured data
Confirm start-of-construction evidence and traceability
Only purchase credits from projects with persistent compliance infrastructure
The Bottom Line: Compliance = Credit Quality
In the post-OB3 world, not all credits are created equal. The value of a credit isn’t just the number on the certificate—it’s the proof behind it. Without that proof, you may own a risk, not an asset.
Coming Next
Issue 6 of 7: Insurers – Can You Underwrite a Risk With No Source of Truth?
About Realizse:
Realizse delivers the trusted compliance and product traceability infrastructure clean energy finance now demands. Our flagship solution, the Realizse Passport, transforms fragmented, unverifiable records into a unified, tamper-proof, cryptographically verifiable system of record trusted by all stakeholders.
By providing audit-ready compliance and product traceability data, Realizse unlocks liquidity, mitigates recapture risk, lowers insurance premiums, and reduces audit cost and response time — enabling faster financing and stronger ROI across the clean energy lifecycle.
