DSD Renewables Closes $140 Million in Tax Equity

The transaction utilizes the new IRA tax credit transferability rules to boost solar development

SCHENECTADY, N.Y. — March 12, 2025 — DSD Renewables (DSD) has closed a $140 million tax equity investment from Morgan Stanley Renewables Inc., structured to utilize the new tax credit transferability provisions introduced by the Inflation Reduction Act of 2022 (IRA). Marking a significant milestone for DSD, this is the first time it will transfer tax credits to corporate buyers. The transaction is also among some of the first tax equity transactions leveraging these new financial tools to support distributed generation assets, and Morgan Stanley Renewables Inc. will retain a portion of the tax credits. This investment will support power purchase agreements (PPA) and community solar projects in markets across the Northeast and in California and Illinois.

“These kinds of transactions further demonstrate the positive impact the IRA has had on renewable energy financing,” said Hannah McGovern, Vice President of Structured Finance at DSD. “The ability to transfer tax credits has created a more accessible tax equity market for solar project investment, helping accelerate the adoption of clean energy solutions across the country. While the structure of these deals will continue to evolve, we expect to see more of these transactions close in the near future.”

The IRA has ushered in a new era for renewable energy financing by allowing companies to sell tax credits generated by solar projects directly to investors. This provision has expanded the pool of potential investors beyond traditional tax equity participants and has opened additional opportunities to support clean energy initiatives, potentially among publicly traded companies and corporate institutions with tax liability.

 “The ability to transfer tax credits has created a more accessible tax equity market for solar project investment, helping accelerate the adoption of clean energy solutions across the country.”

“We are pleased to work with DSD on this transaction which will increase the availability of solar energy and support continued financing in the renewables sector,” said Jorge Iragorri, Head of Renewable Energy Investments at Morgan Stanley.

Since 2019, DSD has raised more than $2 billion in project capital and developed and deployed over 1,000 MW of solar and storage projects across the United States.