Crux 2024 Year-End Market Intelligence Report Shows Accelerating Investments into U.S. Energy and Manufacturing

Investments in manufacturing, critical minerals, nuclear, geothermal, and biofuels made up over 70% of the transferable tax credit market in back half of 2024

NEW YORK, NY, UNITED STATES, February 10, 2025 /EINPresswire.com/ -- Crux, the capital markets technology company supercharging the clean economy, today released exclusive new data through its 2024 Transferable Tax Credit Market Intelligence Report. This report shows continued acceleration of private sector investments into the American energy, minerals, and manufacturing sectors, particularly in new technologies. These investments are bringing strategic supply chains back to the U.S. and spurring energy production in preparation for a new chapter of surging demand.

Surging Energy Demand Reshapes U.S. Power Needs:
Energy demand in the U.S. is rising for the first time in decades, driven by growth of manufacturing and industry, increased electrification, and the rapid expansion of artificial intelligence (AI) and data centers. Together, these factors are placing unprecedented demand on the grid, intensifying the need for more domestic energy production.

In 2024, energy project developers added nearly 40 gigawatts of new generating capacity, of which 95% (38 GW) consisted of wind, solar, storage, waste-to-energy, geothermal, or other tax credit-eligible generating capacity, according to data from the EIA. Manufacturing investment increased nearly five times since 2021 according to data released by the Clean Investment Monitor.

Key findings from the Crux 2024 Transferable Tax Credit Market Intelligence Report include:

1) Tax credit deal pricing remained strong throughout the year. Pricing averaged 92.5 cents for ITC deals (up from 92.0 cents in 2023) and 95.0 cents for PTC deals (up from 94.0 cents in 2023), with larger deals tending to obtain higher pricing. Average pricing and demand for tax credits have remained high following the election in November 2024. In total, Crux estimates $30 billion of tax credit transfers occurred in 2024, including an $24 billion of 2024 transfers and an additional $6 billion of forward-market (2025 or later) sales.

2) Market transparency and liquidity drove greater convergence in tax credit pricing, especially for deals under $20 million in notional value. Pricing particularly improved for smaller developers in the second half of 2024, as better market access allowed smaller tax credit deals to transact at lower discount rates. Smaller developers have historically had very limited access to capital.

3) The market diversified materially over the course of 2024. By the second half of 2024, tax credits generated by newly-eligible technologies such as advanced manufacturing, nuclear energy, bioenergy, geothermal, critical minerals, and carbon capture (which do not often have access to traditional tax equity) made up 72% of tax credit transactions. This was a considerable increase from 1H24. Over the full year, newly eligible technologies made up 52% of the market.

4) Market participants leveraged the flexibility and transparency of the tax credit transfer market. More than 90% of PTC deals were direct transfer deals, while 57% of ITC deals were sold out of tax equity partnerships, reflecting the flexibility of financing options for project developers. This new data highlights the extent to which transferability is expanding the supply of traditional tax equity, which has been limited.

5) The forward market is taking shape and reducing the cost of other capital. Forward commitments for tax credits made up 20% of deal volume in 2024, and deals were concentrated in the second half of 2024. Very few forward commitments occurred in 2023, and this evolution reflects the market’s comfort with taking a longer-term view of tax credit availability. For sellers, forward commitments can represent a valuable form of collateral, enabling them to access capital more efficiently. For loans to the most creditworthy sponsors, advance rates are considerably higher on bridge loans tied to a forward commitment. Interest rates on committed bridges tend to be 50-100 basis points lower than rates on uncommitted loans.

6) Insurance remains a common feature in many deals and is broadly accessible. More than 75% of ITC deals reportedly included a full-wrap insurance policy or a partial insurance policy. Insurance was far less common for PTC deals, with 20% containing insurance; more than 80% of PTC deals indicated that they were fully indemnified by the seller’s parent company. A well-functioning insurance market broadens developer access to capital.

“The 2024 market for energy and manufacturing tax credits exceeded expectations, demonstrating that this new tool is an essential mechanism for scaling clean energy, critical minerals, and manufacturing investments,” said Alfred Johnson, Co-founder & CEO of Crux. “With trillions in projected economic impact, these tax credits are one of the most effective tools for driving private investment into critical industries and energy infrastructure. The well functioning market for credits and associated capital is fundamental to American competitiveness.”

2025 Outlook: Data Indicates Continued Market Expansion:
As first indicated in Crux’s 2024 Q3 Market Update Report, activity in the transferable tax credit market remained high leading up to and following the November Election. The durable market for tax credits and other forms of project finance demonstrates the private sector’s enduring confidence that policy will remain supportive of reshoring domestic supply chains and ensuring we have sufficient power to meet growing demand. Policymakers across the ideological spectrum want low cost electricity, energy security, economic competitiveness, and high American quality jobs.

Independent analysis finds that transferable tax credits will catalyze $2.0 trillion in capital investments, leveraging $4 of private capital for every dollar of tax credits issued. Transferable tax credits have become a significant part of the American energy and manufacturing capital stack.

Crux is a capital markets technology platform for clean energy project developers and manufacturers, providing key data insights and team expertise through all stages of project development. In 2024, Crux facilitated 57 tax credit transfer deals across advanced manufacturing, battery storage, bioenergy, critical minerals, geothermal, hydropower, microgrids, solar, and wind. More than 525 partners have utilized Crux’s platform since its launch in early 2023.

This is Crux’s second-annual data report and is derived from Crux’s $25 billion transferable tax credit transaction database, containing commercial data from proprietary market surveys, transactions facilitated on the Crux platform, and publicly announced transactions completed during 2023-2024. Crux’s data intelligence powers its capital markets platform, including offerings like the Cruxtimate, the market’s only data-driven pricing model to give buyers and sellers better visibility into market value for tax credits based upon a wide range of factors.

For more information on Crux and to download the full report, please visit: https://www.cruxclimate.com/2024-market-report


ABOUT CRUX:

Crux is the capital markets technology company changing the way clean energy, minerals, and manufacturing projects are financed in the United States. Crux’s platform, market intelligence, and expert team help developers and manufacturers raise capital through all stages of project development and operation. The company’s first offering is the leading platform for tax credit transfers. Since its launch in 2023, Crux has raised more than $27 million in funding from venture capital and strategic investors. Crux’s world-class team brings together expertise from energy, tax, finance, government, and technology to power an abundant, resilient, and secure energy future. For more information, visit https://www.cruxclimate.com/.

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