Transferable tax credits are boosting S.C. and U.S. economies; here's how

Greenville News

In South Carolina, demand for electricity is rising. With the rapid construction of new factories, data centers, and the increased electrification of consumer goods, South Carolinians need more power than ever. In fact, as a result of this increased demand, utilities estimate that the peak electrical demand will now be eight times higher in 2030 than what was predicted just two years ago.

This growth in electrical demand, in almost all respects, is good news. It means the economy is humming with new projects coming online and new jobs being created. South Carolina is attracting talent—it was the fastest-growing state by population in the nation in 2023. All the while, in the last quarter, the economy grew by 5.2%.

However, as a result of this positive growth, urgent upgrades to our electrical grid are needed. One critical component of an efficient, reliable grid is power converters, which take direct current electricity from power systems like solar and battery energy storage and transform it into transmittable electricity. Some of these upgraded devices are being made here in Greenville in an EPC Power facility that currently employs 70 South Carolinians. As increased electrical needs create more demand for their products, companies like EPC Power have the opportunity to expand their businesses, grow production capacity, and create local jobs.

Until recent federal legislation, financing options for large business expansion were limited. A powerful new tool — transferable tax credits that allow project developers to sell their clean energy tax credits for cash — helps drive more private sector capital into projects that are solving the urgent demands on our grid. This nascent transferable tax equity market has already grown much faster than experts originally predicted, but for successful sales to take place, two things must exist: a robust marketplace of active sellers and buyers; and technology to expedite and streamline the sales process.

EPC Power was an early adopter of this method; after selling the tax credits for which its South Carolina manufacturing facility qualified, the company unlocked immediate access to new capital and now plans to more than double its local workforce over the next two years. These tax credits are having a direct impact in South Carolina, accelerating economic growth and job creation.

Since its introduction last year, the impact of transferable tax credits has contributed to a stronger national economy through an estimated $7 billion to $9 billion of private sector investment into energy projects across the nation, according to recent market research analysis.

By ensuring startups and small businesses have the capital they need, without paying sky-high interest rates or giving up equity in their companies, more American jobs will be created and more renewable energy will enter the grid. It's a win-win.

Alfred Johnson is the co-founder and CEO of Crux, the sustainable finance technology platform and ecosystem to transact and manage clean energy transferable tax credits.