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Bullboard - Stock Discussion Forum Greenbriar Sustainable Living Inc V.GRB

Alternate Symbol(s):  GEBRF

Greenbriar Sustainable Living Inc. is a developer of sustainable entry-level housing and renewable energy projects. The Company’s primary business is the acquisition, management, development, and possible sale of real estate and renewable energy projects. It operates through three segments: real estate development in the United States (Real Estate), solar energy projects in Puerto Rico (Solar... see more

TSXV:GRB - Post Discussion

Greenbriar Sustainable Living Inc > Bonus Millions to Company Valuation
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Post by JefffCEO on Jul 31, 2022 6:19pm

Bonus Millions to Company Valuation

The recent Senate bill which should be law in the next three weeks (Sen. Manchin signed off) adds over $67 Million to our Company's value.   This is based on the following massive increase to the value of the Federal ITC going from 26% to 40%, meaning Uncle Sam now pays for 40% of our project - PLUS no more need for complex tax partnerships. The ITC under this legislation is fully fungible, meaning you can sell directly to tax investors as a one to one credit for cash, and the investor can use the credits 3 years back for a full refund or use it 22 years foward.  Nowhere in the world does the Government pay for 40% of a solar projects CAPEX.  '

The ITC base is now 30%
Add 10% if your equipment is 40% made in USA - Now 40% at Montalva
Add another 50% if the project is on a former brownfield. 50% if at Brownfield.

Yes, together with Sage Ranch, all of our Greenbriar projects in the USA are very heavily Government subsidized at the Federal Level.  Entry Level Housing in Exurbs (75 minutes from Los Angeles, California) and renewable energy is where you want your public company to be .. Yes, Greenbriar is at both sectors of inductry.

Meeting USDA delegation on Sage Ranch on August 3rd.

Here is the summary verbatim tax credits rules from the US Treasury

July 28, 2022 in Washington, DC

The tax equity market will look different if the surprise deal that the Senate majority leader, Chuck Schumer, sealed yesterday with Democratic holdout Joe Manchin (D-WV) to advance a package of clean energy incentives clears Congress.
 
Schumer will have to try to move the bill quickly.  If it sits for a month while Congress is in recess, it risks being picked apart by lobbyists.  The House is scheduled to leave Washington for the August recess on Friday. The Senate will leave a week later.  If the bill clears the Senate, presumably the House will come back to pass it.
 
Schumer cannot afford to lose a single vote among Senate Democrats. Covid is adding to the drama as it keeps some Senators out.  Nancy Pelosi, the House speaker, faces an equally daunting task.  She can only afford to lose a few Democratic votes in the House.
 
Major Boost
 
The Schumer-Manchin deal would restore federal tax credits to the full rate for renewable energy projects completed in 2022 or later. 
 
They would remain at this level for at least the next 10 years.
 
Thus, for example, solar projects completed in 2022 would qualify for a 30% investment tax credit. 
 
The ITC could reach as high as 50% depending on the location of the project and whether it uses domestic content, but only for projects that are completed in 2023 or later.
 
Wind and geothermal projects completed in 2022 should qualify for production tax credits of $26 a MWh.  The PTC amount is adjusted each year for inflation.
 
The tax credit amounts would start to phase down after annual greenhouse gas emissions from US electricity generation fall by at least 75% from 2022 levels, but not before 2032.  
 
Projects starting construction two years after the phase down starts would qualify for tax credits at 75% of the full rate.  Projects starting construction three years after would qualify for tax credits at 50% of the full rate.  Thus, for example, if the phase out trigger is reached in 2032, projects starting construction in 2033 would still qualify for tax credits at the full rate.
 
The bill provides a new 30% investment tax credit for standalone storage.
 
Solar developers would have the option to claim PTCs instead of ITCs on projects placed in service in 2022 or later. 
 
Tax Equity
 
Starting next year, companies would be allowed to sell most energy-related tax credits to other companies without having to resort to complicated tax equity structures. The seller will not have to report the cash purchase price as income. 
 
The tax credit buyer must pay cash.  It cannot be related to the seller.
 
The seller can sell all or part of its tax credits. It can decide each year how much to sell.
 
The bill also allows most energy-related tax credits that a company cannot use to be carried back three years to get refunds of taxes paid in the past and to carry any remaining tax credits forward for up to 22 years (rather than the current 1-year carryback and 20-year carryforward).  This change does not take effect until 2023. Tax credits that are carried backward or forward cannot be sold.
 
The renewable energy industry had been hoping for a “direct-pay” alternative to tax credits where companies could be paid the full cash value of the tax credits by the IRS under a tax refund mechanism.
 
The additional three types of tax credits that real taxpayers can ask the IRS to pay them in cash are section 45Q credits for capturing carbon emissions, production tax credits for making clean hydrogen and production tax credits for “advanced manufacturing” of wind turbines, towers, blades, solar panels, inverters, trackers, batteries and lots of other products.
 
It will probably be better to wait for an IRS refund for 100% of the credit amount in cash rather than sell these three types of tax credits to third parties for less than the full credit amount. 
 
Fine Print
 
There are two sets of fine print.
 
Project owners must make sure their construction contractors pay laborers and mechanics the same Davis-Bacon wages that are paid on federal construction jobs not only during construction, but also on later repairs and improvements. 
 
Possible 50% ITC
 
The bill has domestic content requirements that are a carrot.
 
The carrot is the ability to claim as much as an extra 10% investment tax credit (or a 10% increase in PTC amount) by using domestic content.
 
Domestic content means all steel, iron and manufactured products must be produced in the United States.  Manufactured products would be considered US made if at least 40% of all the manufactured products used in the project are US made.  The percentage would increase for projects that start construction after 2024 and eventually reach 55% for projects with 2027 or later construction-start dates.  The percentage for offshore wind projects would start at 20% and increase over time, reaching 55% for projects with 2028 or later construction starts.
 
Projects in certain locations will qualify for as much as another 10% ITC (or another 10% increase in PTC amount).
 
The extra tax credits will apply to projects on brownfield sites, in any “area” that at any time after 1999 had “significant employment related to the extraction, processing, transport, or storage of coal, oil, or natural gas” or in census tracts (or adjoining tracts) where a coal mine closed after 1999 or a coal-fired generating “unit” was retired after 2009. 
 
The bill would let all storage facilities be depreciated using 5-year MACRS depreciation.
 
It also increases and liberalizes section 45Q tax credits for carbon capture and allows a tax credit of up to $3 kilogram for producing clean hydrogen.
 
______________________________________________
Cheers
Jeff
Comment by Paddymelt on Jul 31, 2022 8:31pm
Jeff thank you for the thorough explanation. Although i am getting a sneaky suspicion that the Schneppster is secretly on your pay roll. How else to explain that he constantly brings up such negative scenarios as to the future prospectts for GRB. Yet these scenarios play perfectly into your hands and gives you the forum to not only correct his accusations but at the same time allows you to ...more  
Comment by Antioch1202 on Aug 01, 2022 4:38am
This is as good as it gets...we'll see huge upside from here
Comment by PartlyCloudy on Aug 01, 2022 7:19am
So you could sell the ITC for cash right off the bat? For the duration of the PPA? Is that how it would work if the bill is passed? I like it. Makes sense, but sure is a big change.
Comment by shneps on Aug 01, 2022 10:24am
Does this means you have cancelled your agreement with CMEC to design, build and supply the panel equipment? This is amazing you were able to cut the projects capital costs by 50% and now have all the steel components manufactured in the US, pay union wages (as opposed to non union rates - 35% cheaper) I see the union wage rate needs also to be carried into the OPEX cost as well. It is not a ...more  
Comment by shneps on Aug 01, 2022 10:46am
Out of curiousity Jeff. How does the company factor their cost adjustments for the solar panels 25 -30 year longevity where the average 0.8% degradation solar rate is approx. 24% over that 30 year period? Is the entire project based on a cost projection just for the timeframe of the PPOA and then is it decommisioned (and requires cost) or are the projects designed to have to be continually ...more  
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