Marcum 2021 Year-End Tax Guide

How Commercial Solar Projects Work Within ESG There is not a day that goes by when the three letters “ESG” are not in the headlines. ESG stands for Environmental, Social and Governance. ESG has become an important barometer of corporate responsibility and an influence on customer and shareholder trust. A growing number of Fortune 500 companies are issuing ESG reports tracking how well they are doing in these areas, and investors are taking notice. The International Financial Reporting Standards (“IFRS”) is expected to issue ESG standards in the coming months. This will provide guidance for ESG audits for companies worldwide. ESG is a 3-part strategy, and since we live in a global economy, certain geographic areas of the world may tend to focus on one particular ESG component. For example, in the U.S. maybe we are centered more on the Social sector. Pandemic events of the past two years are driving the social focus, with diversity, equity and inclusion efforts at the forefront. Maybe, also, Europeans are more concerned with the environmental side of things, backing more climate change initiatives, while Asia has been more focused on governance to support global commerce. ENVIRONMENTAL Icecaps in both the North and South poles are melting, giving rise tomore severe hurricanes and winter storms. This is not an American problem but a worldwide problem, and it will take both private industry and governments worldwide to address it. The momentum away from fossil fuels is as strong as it has ever been and will continue to grow in the near future. Many Fortune 500 companies, tax-exempts and municipalities have adopted mandates calling for 100% carbon neutrality in the next 10-15 years by shifting to green energy. This provides a huge opportunity in the commercial solar space for developers and investors that want to take advantage of the tax credits, bonus depreciation and cash flows that these projects can generate for 20-25 years or more. Currently, solar panels generate only about 3% of the electricity produced in the U.S., and in many states utilities are either required or will be required to produce 30-35% of their power supply from renewable sources. Commercial

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