Evergrow has successfully completed a tax-credit transfer for a rooftop solar project at a carpet factory in Pennsylvania — a much needed energy source for the factory that would not have been possible without incentives from the Inflation Reduction Act (IRA).
Bloomsburg Carpet Industries in Bloomsburg, Pennsylvania, is a third-generation, family-owned manufacturer of carpets for iconic institutions, including the House and Senate Chambers of the U.S. Capitol, the U.S. Supreme Court, Radio City Music Hall and Carnegie Hall. With the installation of a 1.49-MW solar power system on the roof of the factory, Bloomsburg dramatically reduced its operating overhead and energy costs.
With more than 30 looms operating daily, Bloomsburg’s energy demands are significant. CFO Adam Bowman saw that inaction would expose the company to the higher energy costs that energy industry analysts warn will result from a historic rise in electricity demand unfolding across the United States. Industry experts project electricity demand to rise 25% by 2030, leading to higher electricity prices for consumers. For manufacturers like Bloomsburg, the annual cost increases could be staggering.
Bowman led the effort to bring clean energy to the company’s rooftop to avoid these ballooning energy costs. A combination of incentives had started to make going solar more attractive. But it was ultimately the successful sale and transfer of the tax credits generated by the solar installation that got the financing over the finish line.
At just under $2.2 million in qualifying costs, Bloomsburg’s rooftop solar system earned approximately $660,000 in investment tax credits (ITC). Under the IRA, the ITC was made transferable, meaning taxpayers like Bloomsburg can sell their credits to investors after the project is placed into service. This allows small businesses like Bloomsburg to rely less on debt financing to get their projects off the ground.
Bowman initially tried to find a buyer for the credits himself. But as an independent, family-owned business, he encountered difficulties: Buyers worried about the potential risk of tax-credit recapture. Under the law, if a business is forced to sell the asset that generated the tax credits within five years, some or all of the credits can be “recaptured” by the IRS. For this reason, buyers tend to prefer sellers with a track record of long-term project ownership and sufficient assets to cover an indemnity. Bowman found that even though Bloomsburg Carpet had enjoyed decades of good financial standing, buyers still balked.
That’s when he turned to Evergrow for help finding a buyer and navigating the required tax-credit diligence process. Evergrow uses technology to partially automate the diligence process, making it easier for non-experts like Bowman to provide documentation and complete the process. The company also supplies buyers with a diligence guarantee — meaning buyers are reimbursed for any recapture-related losses. Designed to overcome exactly the kinds of barriers Bowman had faced when trying to go it alone, the Evergrow Guarantee provides full assurance to tax-credit buyers that they’ll be reimbursed in the unlikely event of an IRS recapture.
“Evergrow was on our side the whole time,” said Bowman. “The Evergrow Guarantee was really essential — I don’t think the deal would’ve gotten done without it.”
The project’s impact is already being felt. Bloomsburg is now saving approximately $200,000 per year on electricity costs, plus an additional $50,000 annually from Pennsylvania’s Solar Renewable Energy Certificate (SREC) program. These savings, along with an improved Environmental Product Declaration (EPD) score, strengthen Bloomsburg’s environmental leadership in the textile industry. More details on the transaction are available in this case study published on Evergrow’s website.
“We’re proud to support family-owned manufacturers like Bloomsburg Carpet in their transition to clean energy,” said James Richards, CEO of Evergrow. “This project is a model for how commercial and industrial businesses of any size can take full advantage of clean energy incentives like the ITC — with the right financial partner.”
News item from Evergrow
