What clean energy has to do with opportunity zones

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There are 8,700 designed “opportunity zones” across the United States. There are 128 zones designated throughout Minnesota, 60 percent of them located outside of the Twin Cities metro. 

An “opportunity zone” is a designated historically underserved communities in need of economic development and job creation. The Federal Tax Cuts and Jobs Act that passed in 2017 included a small but important provision dedicated to these opportunity zones. The tax benefit is meant to spur long-term investment in these communities by allowing investors with capital gains tax liabilities to reinvest their gains deferring their tax payment and potentially reducing their capital gains taxes. Learn more about the tax policy here. 

A group of clean energy sector professionals recently gathered together at Avisen Legal for a lunch and learn hosted by CEEM on this very issue. The panel of experts included Avisen’s own Todd Taylor along with Jeremy Kalin, Adam Bernstein from North Sky Capital, and Lynn Ostermann who works with MN Opportunity Collaborative, which works to inspire investment in designated Opportunity Zones. 

Jeremy Kalin described the potential for opportunity zone investment like this, “how do we make the right thing easier?” He painted a picture where clean energy businesses could leverage the tax incentives and available capital for new projects into an opportunity to add clean energy or efficiency to the building plans.

While opportunity zones have been painted by some as merely an opportunity for the wealthy to shelter their money (like in this New York Times article), this event showed how the tax benefit expands into a new universe of creditors. As one of the speakers put it, “this injects a little bit better returns, so you can accomplish some good.” All of the speakers conveyed their enthusiasm for giving local investors an opportunity to invest their money, get excellent tax benefits and provide a lot of social good in the process. 

Berstein, from North Sky Capital has years of experience helping finance clean energy infrastructure projects. Over the years he’s seen a lot of enthusiasm for financing wind and solar projects. He said Opportunity Zones provide the catalyst for investors to take a look at projects that aren’t wind and solar (like energy efficiency projects that could help save building owners big bucks over time). 

Learn more about how you can get involved with Minnesota’s Opportunity Zones at MN Opportunity Collaborative

This event was part of a new lunch and learn programming opportunities offered by CEEM. Check out our event page for future opportunities.