Transferable Tax Credit (TTC) Procurement
Reduce your organization’s tax burden with TTCs
For corporate buyers, transferrable tax credits (TTCs) can be an attractive opportunity to support the development of new renewable energy projects while realizing tax savings. TTCs have quickly become an essential tool for financing new clean energy projects and are particularly enticing to corporate buyers because credits are sold at a discount. The TTC market continues to demonstrate significant resilience and explosive growth even in the face of broader market headwinds.
What are transferable tax credits (TTCs)?
The transferability of tax credits is a mechanism, enabled by the Inflation Reduction Act (IRA), that allows renewable energy developers to sell federal tax credits generated from qualifying projects to corporate buyers. TTCs are generally grouped into two types of credits: investment tax credits (ITCs)—which are upfront, lump sum, credits based on a percentage of the capital cost of a project —and production tax credits (PTCs)—which are ongoing credits based on realized electricity generation over time (usually 10 years).
Why consider TTCs?
Bundling TTCs with environmental attribute certificates (EACs)
By themselves, TTCs do not come with any environmental attributes or the ability to make renewable energy usage or emission reduction claims. However, 3Degrees is uniquely positioned to help companies pair TTCs with RECs, PPAs, or other commodities like carbon credits, allowing corporate buyers to unlock both financial value and climate impact in one coordinated move. Instead of managing separate efforts, your organization can use TTCs to reduce tax liability alongside having EACs to apply towards any climate or renewable energy targets. A company’s Tax and Sustainability teams both benefit instead of negotiating over separate budgets.
Credits sell at a discount, offering a financial benefit to the buyer (usually a savings of 4-8%). TTCs can be structured as single-year transactions or multi-year “strips,” depending on your ongoing tax liability.
Your TTC purchase can help bring new renewable energy projects online by providing critical capital to developers who lack the tax appetite to monetize credits themselves.
While not risk free, risks tend to be more discrete and easier to manage contractually than those associated with power purchase agreements (PPAs). Generally, TTYC contracts are less complex than PPA contracts.
Unlocking renewable energy claims with tax savings
3Degrees helps bridge this gap. As a trusted renewable energy advisor with an industry-leading, in-house environmental commodity trading team, we specialize in maximizing both the financial and environmental benefit. We can pair tax credit purchases with RECs or PPAs, allowing your organization to realize both tax savings and credible sustainability claims.
Standard TTC transactions do not include renewable energy certificates (RECs), meaning the tax credit alone does not allow an organization to claim the use of renewable energy or progress toward scope 2 targets.
3Degrees TTC Advisory Services
Stakeholder discovery, educational workshops, and developing a custom procurement strategy aligned with your financial and climate goals.
Sourcing the best offers via our direct developer relationships and TTC marketplaces, followed by due diligence and credit selection.
Leading contract negotiations and ensuring all sustainability claims adhere to GHG reporting and accounting standards.
Global, trusted renewable energy advisor
3Degrees provides an end-to-end advisory process to ensure every transaction drives maximum impact while limiting risk.
Renewable energy projects contracted
GW PPA transactions executed
Countries supported through renewable energy consulting
Renewable energy advisory and implementation engagements completed
GW global renewable energy transactions contracted
Powered by 20+ years of experience serving Fortune 500 companies, we provide:
We understand the technical and economic nuances of the specific renewable energy projects behind the credits, which helps our clients mitigate risk and highlight additional benefits.
Our direct developer relationships give you earlier access to a broader pool of projects, including opportunities not found on public marketplaces and credits with project RECs.
We are uniquely positioned to package TTCs with RECs, PPAs, or carbon credits to maximize environmental claims value alongside financial benefits.
Suggested insights
Frequently asked questions about TTCs
When is the cash required for a TTC purchase?
Payment timing is a negotiated term. While some structures may require payments before the tax savings can be realized, 3Degrees helps buyers limit upfront cash outlay by negotiating the timing of credit payments to be as close as possible to when the buyer can monetize the credits.
Is there a minimum company size required to participate in a TTC deal?
Yes. While the law doesn’t set a minimum, transaction costs (legal, due diligence, insurance) make small deals inefficient. Generally, a tax liability of at least $10M is needed for a standalone deal to make economic sense. Smaller buyers might want to look at aggregated funds or syndicated deals.
Is there a particular capacity of renewable energy consumption that a company needs to have for a TTC to be economically viable?
No. The amount of RECs you are looking for can be considered completely separate from the dollar amount of the TTCs you are purchasing. 3Degrees can help you pair a small REC purchase with a large TTC purchase or vice versa.
Is there a particular capacity of renewable energy consumption that a company needs to have for a TTC to be economically viable?
No. The amount of RECs you are looking for can be considered completely separate from the dollar amount of the TTCs you are purchasing. 3Degrees can help you pair a small REC purchase with a large TTC purchase or vice versa.
Can we use TTCs for scope 2 emission reductions?
Not by themselves. TTCs alone do not carry any environmental attributes and cannot be used to make emission reduction claims. To claim scope 2 reductions, you must have renewable energy certificates (RECs). This is why the “bundling” strategy of TTCs paired with RECs is so critical for meeting environmental, social, and governance (ESG) goals committed under frameworks like SBTi and RE100 in addition to realizing tax savings.
Are there sustainability claims that can be made through a TTC deal (without bundled RECs)?
TTC deals can support the buildout of new clean energy resources. TTC deals give companies the ability to tell a story about the impact they are having by directly supporting specific projects through the purchase of tax credits. However, as mentioned above, without bundling RECs into the deal, a company cannot make renewable energy usage or emission reduction claims from the TTCs themselves.
Why should I consider bundling a TTC purchase with RECs?
While TTCs and RECs can be purchased separately, doing so often leaves money on the table and requires additional administrative effort. Bundling enables companies to streamline tax and sustainability strategies into a single transaction, and maximize the impact of every dollar. The tax team achieves tax savings and the sustainability team makes progress toward climate goals, all while receiving competitive credit pricing.
How does the "One Big Beautiful Bill Act" affect this?
The OBBBA shortened the time frames of some IRA incentives, but preserved the transferability of tax credits. We see a robust market for these tax credits existing well into the 2030s, giving companies confidence to build long-term tax strategies around them. As far as the renewable energy side of things, OBBBA forced developers to pull development timelines up, so we expect more projects to be built before 2029 than originally anticipated and thus more tax credits will be available in this timeframe.
Where do TTC transactions take place? Is there a marketplace?
TTC deals are bilateral transactions between a corporate buyer and a project developer. Buyers and developers can find each other in a variety of ways, but most often advisors help either party look for a suitable counterparty. There are also over a dozen marketplaces where TTC deals can be sourced and transacted. With our long-standing relationships with a broad network of developers, 3Degrees can source deals directly or work through marketplaces. Because we work with developers to secure offtake via PPAs earlier in their project development cycle, we may often learn about TTC opportunities prior to them being posted on marketplaces.
Where within an organization do you most often see TTC deals initiating?
In some organizations interest originates from the tax and/or finance team, because there is such a clear financial business case – it can result in immediate tax savings in the millions of dollars. In other companies, the energy and sustainability teams are the ones to initiate interest, given their awareness and experience in renewable energy markets, and then bring the opportunity to their tax and finance teams.
*Due to potential legal and regulatory restrictions in certain jurisdictions, this material is only intended to be accessed in those jurisdictions where to do so would not constitute a violation of the local marketing laws. This material is provided as general information only. It does not constitute an offer to sell or the solicitation of an offer to buy any investment. Nor does it constitute the giving of investment advice. For more information click here.
Ready to get started?
We help companies turn tax dollars into climate impact. Start unlocking your renewable advantage today.
