The recent changes in the tax code have facilitated the monetization of renewable energy tax credits, making it more accessible for emerging growth companies. These tax credit transactions have garnered significant interest from venture lenders seeking to enhance their balance sheets amid a slowdown in venture capital funding. The innovative approaches in leveraging investment tax credits (ITCs) and production tax credits (PTCs) have opened new avenues for climate tech companies to sell or transfer their credits, even to unrelated parties, under the Inflation Reduction Act of 2022. This trend has seen a surge in deal flow, and this growth is expected to continue, with annual available tax credits anticipated to surpass $30 billion. The alert emphasizes the importance for venture lenders to understand the nuances of these tax credit structures, as companies can now utilize a broader range of structures customized to meet the needs of all parties involved. The article highlights the use of 'warehouse' facilities akin to those in fintech lending, where clean energy projects are set up as separate entities to facilitate the financing of tax credits through loans secured against these credits. Lenders are advised to pay attention to the implications on their existing credit facilities and the potential overlapping obligations that may arise. Moreover, the discussion delves into the risk of recapture in ITC projects, where projects may lose their tax credit qualification status, affecting the tax liabilities of credit holders. Lenders are urged to assess and address this risk, considering scenarios like casualty events, project discontinuation, or asset disposals. Evaluating the economic impact of these transactions is crucial, and lenders are advised to ensure compliance with the loan agreement terms and potential effects on prepayment obligations. Overall, these developments present opportunities for both climate tech companies and venture lenders, but a thorough understanding of the structures and risks involved is paramount for successful transactions.