OZs (Opportunity Zones) in the United States provided new possibilities to developers. The contest is now on to decide whether developers of renewable energy can catch up to their real estate counterparts in using this latest tool.
Opportunity Zones basically are financially distressed communities where new investments, under assured conditions, may be appropriate for favored tax treatment.
There are 8,700 communities OZs located across 5 US territories and 50 states including 862 in Puerto Rico and 878 in California. With more than 30 million people living within these places, this inducement creates one of the major expansion markets in the United States.
Tax Breaks and Project Funding:
OZs give both corporations and individuals the possibility to re-invest existing capital gains into “QOFs” (Qualified Opportunity Zone Funds) for receiving tax breaks to help fund investment in indigent areas. Research shows that there are more than $6 trillion in suitable capital gains within the US and $300 billion of it has been assigned for Opportunity Funds to date.
So far Opportunity Zones have been acknowledged as a vital development means by the real estate industry, which have been looking to it as an expansion prospect. Though, by clean energy developers they remain an underused tool. In order to convert to a low-carbon economy, big and small communities need development models able to duplicate across a series of diverse variables, something that OZs can help achieve.
Whereas, it remains to be seen that if Opportunity Zones will develop into green technology and renewable hubs. But one thing is sure that OZs promises to be the main tool in the future development of U.S.
A Sustainable “Opportunity”:
Specialists believe that sustainable development projects and renewable energy can benefit from the incentive. Founder of Homecoming Capital, Cody Evans said, numerous renewable energy projects are well-matched for this program as they are built in those places where most real estate developers can’t invest like in rural communities.
Ricardo Rosselló, Puerto Rico’s Governor, expects to use Opportunity Zones as a main component in upgrading the territory of the US.