Extract to table

The PPA between Saguaro Flats Solar LLC and Meridian is a virtual PPA — a financial settlement mechanism — and must be distinguished from two other contractual structures that could raise ownership and ITC concerns: (i) a physical PPA, and (ii) a sale-leaseback arrangement

The CfD is economically identical to an interest rate swap or commodity swap, in which one party agrees to pay a fixed price and the other agrees to pay a floating price, with net settlement

Under IRC § 50(a)(1), if investment credit property (including energy property eligible for the ITC) is disposed of, or otherwise ceases to be investment credit property, before the close of the recapture period, the taxpayer must recapture a portion of the ITC previously claimed

(b) If the PPA's change of control provisions permit transfers during the recapture period, those provisions should include a condition that any permitted transferee must assume the obligation to maintain the facility as investment credit property and to refrain from any action that would trigger recapture

For the construction period, this means that all laborers and mechanics employed by Sunbelt Power Construction LLC (as the EPC contractor) and all subcontractors performing work on the facility must be paid at or above the applicable Davis-Bacon prevailing wage rates for each craft classification

For the alteration or repair period (the five years following placed-in-service), this means that any alteration or repair work performed on the facility — including major maintenance, component replacements, and capital improvements — must also be performed at prevailing wage rates