How one of the industry’s first advanced manufacturing tax credit transactions took place

About EPC Power:

Founded in 2010, EPC Power is headquartered in San Diego County, California and has become the premier utility-scale inverter manufacturer in North America. The company is expanding rapidly, with major multinational corporations brand-labeling its products. 

EPC is committed to designing every detail of its products and manufacturing them in owned facilities in the USA. They opened their second manufacturing facility in Greenville, South Carolina in 2022. 

EPC’s main product lines include the 1 MW - 6 MW CAB1000 for utility-grade applications and 250 kW - 500 kW Power Drawer for business and facility applications. EPC’s solutions are fully scalable and have been deployed at 100+ MW sites.

Getting the deal done: Leveraging Crux for an efficient transaction

Listing credits

In 2023, following the passage of the IRA, EPC Power decided to seek offers on its newly generated 45X advanced manufacturing tax credits. EPC Power came to Crux to access its large network of tax credit buyers and intermediaries to maximize the value of their tax credits and drive an efficient sale. By working with Crux to list its credit and find attractive buyers, EPC Power was able to close very quickly, amidst a competitive bidding process. 

“We had started soliciting the sale of our tax credits ourselves through connections from our board and other corporate networks, but we quickly realized a broader network would be valuable.” – EPC Power

EPC Power worked with Crux to build out its listing on the platform; these anonymous “teasers” take less than 10 minutes to post. Tax credit buyers could then discover EPC Power’s credits on Crux and submit non-binding bids. From EPC Power’s perspective, quick exposure on the platform provided a great deal of interest through bids representing negotiable terms inclusive of a variety of factors like price, closing timeline, and payment terms. 

After listing credits on Crux, EPC Power was able to quickly generate interest from several potential buyers. The first bid for EPC Power’s 2023 credits was received within a few hours of listing, and the second bid only a couple days later.

“Crux was very helpful with initial discussions with interested buyers, helping us understand the differences in the buyers and building out the listing.” – EPC Power

From EPC’s perspective, competition helped EPC find the right buyer quickly and negotiate terms across factors like price, closing timeline, and payment terms.

Bidding on projects

EPC ultimately selected a bid from a prominent tax firm. Crux was built to support not only tax credit sellers and buyers, but intermediaries like banks, tax advisors, and syndicators, helping them access a diverse and robust supply of tax credits for their clients.

Crux worked hand-in-hand with this advisory firm, helping them review credits that met their buyer’s needs and make an initial non-binding bid very shortly after EPC Power listed its credits for sale on the platform. 

Closing the transaction

Crux’s 2024 whitepaper on due diligence and risk mitigation in transferable tax credit transactions showed that early alignment between buyer and seller in the due diligence process is crucial for ensuring successful and efficient transactions. Over 70% of advisors indicated that buyer education is the most important driver of a smooth transaction, while 66% emphasized the importance of seller preparation for due diligence.

In many deals, Crux’s Market & Transactions Team helps buyers and sellers prepare to transact. However both parties in this deal entered the transaction well-versed on the transferable tax credit market and transaction process. As a result, once EPC Power selected the winning bid, the transaction progressed quickly. 

“We were able to close the transaction in less than 45 days. It was faster than expected.” - EPC Power

In addition to securing a buyer for the 2023 credits, EPC Power was able to complete a follow-on transaction of 2024 tax credits with the same buyer through Crux.

The impact of tax credit transactions

Since the passage of the IRA in August 2022, private companies have announced more than $628 billion in investments in American clean energy manufacturing and clean power.

In the first year of transferability, an estimated $7–9 billion of tax credit transactions occurred across the country. Data from Crux’s authoritative transaction database indicates that this number will likely exceed $20 billion in 2024. Transferability is a key tool for companies seeking to efficiently monetize tax credits related to clean energy project development and manufacturing.

Efficiently matching buyer and seller on Crux meant that EPC Power could reinvest in their business. EPC Power has announced that it’s growing its South Carolina operations, investing $5 million dollars into Greenville County and creating 150 jobs over the next two years. The South Carolina facility is EPC Power’s first on the East Coast to expand production capacity because of increased demand. 

“The IRA, particularly the 45X advanced manufacturing credits, provides EPC Power with beneficial money to help expand our business, increase our production, and hire more employees, so we can continue to help drive cleaner and more robust electric grids.” – EPC Power

More than $25 billion in tax credits spanning nearly every transactable clean energy technology have been listed for sale on Crux since its launch in 2023.  

If you’d like to learn more about Crux and engage in the growing market for transferable tax credits, get in touch today.