Welcome to season three of MTE's Plugged in podcast.

This season we will continue to explore the world of electric vehicles.

Whether you're a seasoned EV driver or you're just beginning your journey into electric vehicles, this podcast is for you.

For a more enhanced experience, be sure to watch the video version of this podcast that will be linked in the show Notes.

Hello everybody and welcome to MTE's Plugged in podcast.

I am Amy Byers and I am here as always with Brandon Wag.

Hello Brandon.

Why don't you tell us who we're going to be talking to today?

Hey everybody.

Today we are welcoming Representative John Carson to the Plugged in podcast.

John serves as a state representative in the Georgia General assembly and he's also the managing partner at Armagh Capital in Atlanta.

That's a firm that buys and sells renewable energy tax credits and facilitates the trade of those.

John, welcome to the podcast.

Tell us a little bit about yourself, if you don't mind.

Thank you very much.

Thank you, Amy.

It's a pleasure to be on.

Just like you said, basically what we do is we provide financing for EV charging installations, community solar, cni, all types of different types of renewable energy.

Myself, I'm a CPA, have been so in Georgia for 25, 27 years thereabouts.

Been in tax credit brokerage for about nine years.

Obviously in my background we did a lot in regard to the Georgia film credit with all the various films being shot and so forth.

I've also done some Georgia historic credits, continue to do those as well as have done some renewable energy work in the past.

And looking forward, we've already done quite a bit here at Armagh and looking forward to doing more.

So I have a question for you.

While a lot of our listeners are EV drivers, our podcast tries to be a resource of a variety of audiences interested in innovations and trends in the energy industry.

One of the trends that we have seen is is the direct pay tax credits that nonprofits and other organizations who don't pay taxes can still benefit from tax credit incentives.

So the question is, can you share a little bit about this and what our members should be aware of?

Absolutely.

Great question.

So the Inflation Reduction act passed in 2022 and signed by President Biden just basically put our industry, it just set forth a lot of great momentum for these projects.

Specifically, what you're talking about is the direct pay statute in regard to direct pay to like a municipality, like a city or a county or an association, somebody that's a nonprofit or does not pay taxes or what have you they can still qualify for these incentives by claiming what we call section 6417.

Section 6417 is a part of the Georgia of the federal tax code.

Just like 401k or 529, those are tax sections.

Section 6417 specifically allows the IRS and Treasury to write a check effectively to a city of Murfreesboro or a city of Nashville for putting in an EV charging installation.

And the best advice that I can give your viewers, Amy and Brenda, the best advice I can give is to explore all those various opportunities because there is so much out there through the Inflation Reduction act, both through the Department of Energy, the Department of Transportation, regarding NEVI funds as well as the tax credits and the direct pay statute.

I think one of the things that your viewers should do is make sure they explore all opportunities in regard to the grants, forgivable loans and so forth in regard to this to take advantage of as much financing opportunities as possible.

That's great advice, John.

And you know, I know we're talking about taxes and that makes really great interesting podcast material, but it, but in reality it makes such a difference.

And so for years we kept hearing municipalities that wanted to do things like convert their fleets to electric, but they, the word tax appetite kept coming up.

We have no tax appetite.

Well now even if you have no tax appetite in that traditional sense, you can really make some savings.

And sometimes it's the difference between penciling that ROI or not.

So I appreciate you sharing that.

It makes all the difference in the world.

That's exactly right.

Yeah.

So I'm curious, and you get to see this from a different perspective than even we do, but what role does ARMAGH Capital see for EV infrastructure like charging stations in the future?

What are you all seeing?

Yeah, so what we're seeing is that it seems like a number of states are doing a second round of NEVI funds and with those NEVI funds they're trying to putting in various installations, some in 4Q24, but really more so in 25.

People are gearing up for 25 installations and then using the Section 30C credits on top of that.

Section 30C is another part of the, I'm sorry, the federal tax code.

And that is basically awarding a tax credit for an installation of an EV charging installation.

So let's say there's a, let's say there's a raceway along I24 somewhere in Tennessee.

If someone were to spend $1 million putting in a bank of eight chargers level two or level three what have you.

They are limit.

They are, excuse me, they are, they can qualify potentially for a 30% tax credit on that million dollars of expenditure.

And the total amount of the credit is limited to 100,000 per charger point.

So as long as if you have eight charger points, you're limited to 800,000, but you're going to qualify under the, on the calculation of that 300,000 credits.

What we do that's a little bit different guys, is that we're a tax credit brokerage firm and we, we really specialize and cater to the mid market, I would argue.

So we don't look at chargers at someone's house and we're not doing massive, massive solar farms, you know, 250 megawatts with 200 million credits or what have you.

We're serving that middle market space.

We're serving those installers that need tax credit financing for a project like this size.

Hopefully we can bundle it with quite a few other projects.

But we're also selling it to our buyers that have been buying credits from me for years that they don't want a minimum of.

Say I don't want to have a minimum of 50 million credits or 25 million credits or what have you.

I need something digestible that I can acquire X number of credits and use it against my liability.

And we're happy to do that.

Obviously we're happy to do larger, much larger transactions as well.

So that's, that's pretty interesting.

So I guess a question I have about that, my next question was about emerging technologies.

But maybe it's better to ask emerging markets, what are some markets that you see that maybe they don't have that big scale, but they have a smaller scale and they still can benefit from some of these credits and investment incentives.

What are some emerging technologies or markets in that arena that you all see on the horizon?

Yeah, I would split that question in two if I can.

Emerging market and emerging technology.

Emerging market.

What the IRA has done is really unleashed a lot of private sector capital into these renewable energy projects.

One area we're helping, we already have process a number of tax credits.

In regard to this is where a private, let's say a city of Brentwood, and I'm trying to pick some cities in Tennessee, let's say a city of Brentwood wants to offer EV charging, but they don't want to take the vote either from a public policy standpoint or the political risk of voting to spend taxpayer money for an EV charging station.

What they could do is they could partner with A private company, a private company would install it, private company would maintain it and so forth.

And a private contractor private company would come in and say we just want a 99 year lease on a piece of land within city of Brentwood.

We would negotiate that with the city of Brentwood.

We would, the, the private company would fund the half million or million dollars of installation costs.

The private company would qualify potentially for NEVI funds, grants or what have you, as well as they would qualify for the tax credit incentives.

We can help them out with that, of course.

But the beauty for the city of Brentwood is they would not.

They would be offering EV charging services without providing any, without outlaying any cash whatsoever.

You had mentioned earlier about 6,417 that provides a 30% credit.

So city of Brentwood could potentially do that, but they would have to front out the cost for the development.

They would get 30% back as a refund, but then they would have to obviously maintain the equipment and maintain it going forward.

What we see as an emerging market is a lot of private developers now that these credits are transferable at a smaller scale than large utility farms or what have you.

Have you many private contractors are going in, providing these stations and using the tax equity for financing for their project.

Not just for some large, large something for them in what they're doing.

And you had mentioned emerging technology.

Brenda, if I can answer that question.

What we really see is huge is clean hydrogen.

What you see going on with clean hydrogen in regard to the massive, massive facilities and making fuel cells, shipping them overseas.

I've seen a number of fuel cells being sold to retailers to operate forklifts used in the transportation industry.

I think we're going to see a lot in that space particularly.

And then also you have some other emerging technologies such as sustainable aviation fuel, methanol diamethyl ether, things like that.

We're already bidding on some of those projects as well.

But the hydrogen I think is really particularly big.

So a big takeaway I think for me is for a long time I always thought of tax credits, tax incentives, those sorts of monetary incentives for investment.

I always correlate them only to solar.

But you're saying there's a variety of technology.

So if you're wanting to do something in the energy sector, but you don't have the land or you're your property doesn't face the right direction to maximize solar.

These do apply outside of just a solar project.

Exactly.

As a result of the Inflation reduction act of 22, there is about 11 different technologies that Generate investment tax credits or production tax credits such as clean hydrogen battery storage.

Obviously the solar applications don't have to be economical anymore, just only on utility scale.

You can do community solar, you can do cni, you can do advanced manufacturing.

That's the credits awarded for the production of solar panels.

Just wind power is another that's not as popular in our area in the southeast, but it's obviously much more power powerful out west where you do have higher winds.

There's so many different technologies that are now qualifying for these credits.

So what advice would you give a startup or entrepreneurs looking for investments in clean energy sector?

I would say the best advice that I would give, Amy, is like I said earlier, explore all the opportunities in regard to financing.

And it's not just the tax credits.

It could be the NEVI grants, it could be the forgivable loans, it could be doe, Department of Energy funding, Department of Transportation funding.

I've seen several transactions here where our clients, in other words, the sellers of the credits, did not timely apply for low income housing community bonus, and so they missed out on a 10% adder.

We've seen some where someone did not timely apply for the REAP grant.

The REAP is the rural electric program and that unfortunately cost them quite a bit about 30% of the capital outlay.

The best advice, Amy, that I can give is what I said earlier.

Explore all the financing opportunities.

Because what we're talking about in our industry is something that's highly capital intensive.

To any extent that an investor or an entrepreneur can help leverage those costs such that they don't have to come out of pocket $1 million, they have to come out of pocket $400,000 net or $200,000 net.

Or instead of 10 million, they come out of pocket $1 million or $2 million out of pocket net.

It is an absolute game changer.

And honestly, that's how the Inflation Reduction act was designed to really put a catalyst and lay the foundation for doing much more of this clean energy projects.

So to kind of finish this off, what if someone, first of all, is there anything else that you feel like our listeners need to know about that we have not asked you?

Obviously just as a plug, what we do is we turn these credits into cash and we do so very efficiently.

I wouldn't say that any project is too small.

We've had people try to bring us 23,000 credits, but I'd rather not do something that small.

When you're talking about EV credits, somewhere in the 400 to 500,000 credits generated or more.

That's typically in our space that we look at.

But what we'll try to do is make a difference for these investments coming on board and have a long term relationship and partner with your listeners.

That's what we're interested in.

And I will just tell you again, this is an area that we focus on in the mid market.

What I would call the mid market and we're typically offering, from what I understand from the market, about 7 to 10 cents more per credit than most of our competitors are because they're just larger and they can't do these as efficiently as we can.

So if someone is interested and they want to learn more, where do they need to go?

What's the best thing for them to do?

Sure, you can just go to our website.

It's Armaghapital.com A R M A G H Capital dot com.

You would ask Brendan how to pronounce that.

It's actually a town in Northern Ireland where my family's from years and years ago.

It's actually the ecclesiastical or Christian home of the old nation of Ireland from the 1800s.

It's actually where St Patrick had a lot of his start.

So go to our website, take a look and you can call us at the number there or obviously email us from the contact information we're here to serve.

And I will tell you what we really do is we're really getting a lot of information out as opposed to taking these credits that my clients asked me to sell and going to a corporation or bank or CPA firm.

We don't do that as much as we do get information out.

Because this is a new phenomenon, that's a new market not in regard to renewable energy, but financing.

In this structure of renewable energy.

What we're all about is education on both sides.

Both for the developers of EV charging, but also for the buyers of the credits.

That sounds great.

And I now kind of want to do a podcast on the history of the town in Ireland.

That was very interesting, but go ahead.

I was just gonna say, John, I mean what you said about getting information out, that's what Amy and I are really wanting to do.

We want to be a resource for our folks that are interested in not only EVs but anything energy related.

And like you said, changes so often.

When we first thought about doing this podcast, we were like, how are we going to have something to talk about every time we record?

But it changes so much.

And so we want to be that resource as people have goals in their energy, work, life.

We want to partner with them to make sure they achieve that.

So appreciate you being here and sharing a lot of that because that's something that does make a difference in these projects and we want all of our members and all of our listeners to have successful projects.

So thank you for sharing all this with us.

Absolutely.

And I just must say the tax incentives and the grants that are coming from those two departments, Department of Energy, Department of Transportation, it's literally the difference between these projects happening and not.

And I just want to be a resource for entrepreneurs like myself that are trying to find answers and we're a good place to start for those answers.

John, thanks again for being with us today and thanks to everyone who is listening today.

If anyone has any questions about MTE's EV Ready program, the Night Flex rate or anything EV related please visit drive EV.com or email us@evcarclubte.com and until next time plug in, power up and drive safe.