Tax equity is a structured equity investment (made at commercial operation) in U.S. renewable energy projects to help project developers/ sponsors monetize or finance the various federal tax benefits including Productions Tax Credit ("PTCs"), Investment Tax Credits ("ITC") and accelerated depreciation.

From the time J.P. Morgan signs a letter of intent we can usually complete the necessary documentation and due diligence for a tax equity financing in 30 to 90 days depending on the developers'/sponsors' experience in executing structured financings, the completeness of their project level due diligence information and their resources to execute an efficient close.

No. We only provide tax equity financing, with funding upon the project reaching commercial operation.

At this time we are only making tax equity investments.

J.P. Morgan will finance various types of renewable power projects including wind, solar, geothermal, and biomass. To date we have had the most success in the wind market, but we have also financed solar and are actively seeking to finance geothermal.

In order to raise institutional tax equity a project needs to have 1) a proven renewable energy resource (wind, solar, geothermal) or fuel supply contract (biomass), 2) commercially proven technology, 3) an investment grade off-take contract or other price support covering the base financing term and 4) an experienced/financially stable project sponsor capable of making a meaningful investment in the project.

Since our focus and added value is financing assets which generate federal tax benefits our focus is on U.S. renewable energy projects. J.P. Morgan has closed transactions in 17 states across the U.S. from Maine to Hawaii and from North Dakota to Texas.

J.P. Morgan is still actively pursuing new tax equity investments in renewable energy assets.

The ARRA provided renewable energy projects with a variety of new incentives to encourage further growth in the business and help overcome some of the financing issues created by the banking and financial crisis. Arguably the biggest change allows projects the option of electing a 30% ITC based on qualified cost in lieu of the 10 year stream of PTCs through 2010. In addition, projects have the option to convert the 30% ITC into a 30% cash grant from the U.S. government payable within 60 days of submitting the application. Thus projects with high costs and low capacity factors would be expected to elect the 30% ITC/grant option while lower cost projects with high capacity factors would be expected to choose the PTC option. J.P. Morgan has established tax equity partnership flip structures to finance renewable energy projects under either scenario.