Project Financing

Businesses can recover investments in certain property through depreciation deductions. The MACRS establishes a set of class lives for various types of property, ranging from three to 50 years, over which the property may be depreciated. For solar, wind, and geothermal property placed in service after 1986, the current MACRS property class is five years. With the passage of the Energy Policy Act of 2005, fuel cells, microturbines, and solar hybrid lighting technologies are now classified as 5-year property as well.

A financial instrument held by a third party on behalf of two other parties in a transaction, The funds are held by the escrow service until the service receives the appropriate written or oral instructions or until obligations have been fulfilled by participating parties. Securities, funds, and other assets can be held in escrow.

A CREB is a special type of tax credit bond providing rural electric cooperatives, municipal electric utilities, and government entities (including tribal councils) the equivalent of an interest-free loan for financing qualified energy projects. CREBs were created in the Energy Policy Act of 2005, and are largely modeled on the Qualified Zone Academy Bond program that provides tax credit bonds for school renovation and upgrades in certain qualified school districts.

Total assets divided by shareholder equity. The asset/equity ratio is often used as a measure of leverage, or how well a project utilizes investment capital to realize return for investors.