How Palmetto leveraged tax credits to scale its business

Palmetto is a leading provider of clean technology products and services focused on simplifying the adoption of renewable energy for homeowners, fostering innovation among businesses and clean tech entrepreneurs, and driving scalable environmental impact. A large part of Palmetto’s offering is low-cost residential solar projects in eight states across the US.

Palmetto is on the cutting edge of technology, but scaling residential solar requires more than innovation and customer demand. It also requires capital. Monetizing the transferable tax credits generated by its residential solar portfolio is crucial to Palmetto’s business model, which depends on connecting its growing customer base with a large number of tax credit buyers. 

A sophisticated developer seeking to recycle capital at scale

Residential solar companies don’t typically take advantage of tax equity partnerships. Tax equity partnerships are complex and require internal resources and expertise. Palmetto is unique among solar-plus-storage developers in that it is no stranger to tax equity — the Palmetto team has experience and expertise in selling tax credits out of tax equity structures. 

Residential solar tax credits carry some interesting complexities, however. Unlike utility-scale projects, which may involve one large asset, residential solar portfolios include thousands of small projects spread across rooftops in different geographies, each tied to an individual homeowner. From an operational perspective, this means developing the technology infrastructure to qualify and sign up customers, guarantee quality, and ensure ongoing data and asset management across Palmetto’s portfolio. From a tax credit perspective, it makes aggregating the tax credits, selling them efficiently, and satisfying buyer due diligence a challenge. 

Palmetto had many credits to sell over multiple years and wanted a partner that would provide exposure to a wide array of potential buyers and market expertise. Execution was important, but so too was reach, liquidity, and the ability to tranche credits across multiple buyers. This was key to reducing risk and maximizing proceeds. Enter Crux.

Connectivity and liquidity through Crux’s tax credit marketplace

The Crux marketplace offered Palmetto access to a broad and growing network of tax credit buyers and advisors, including many that were new to residential solar and were attracted by the ease of transferability. The collaboration ultimately helped place more than $300 million in tax credits from Palmetto’s portfolio with a syndicate of buyers over multiple credit years.

Crux offered Palmetto much more than access to a marketplace of buyers. It also helps developers accelerate deals, increase buyer comfort, and drive repeatability and scale.

Deep market reach 

The Crux platform enabled Palmetto to engage with a wide array of buyers. This was crucial for diversifying risk and maximizing value.

Deal structuring and tranching

Crux helped tranche one large credit sale into three separate buyer placements and facilitated another major transaction with a syndicator. 

Buyer comfort through market standards

Residential solar is often misunderstood or overlooked by institutional buyers, who are more familiar with utility-scale projects. For example, potential buyers may not be aware of the reduced risk of recapture associated with residential solar projects or understand that the credits had already undergone vigorous due diligence by the tax equity partner. 

Crux played a key role in educating buyers, leveraging its experience and market expertise to establish norms and expectations around credit quality, due diligence, and deal terms. 

Long-term relationships 

Crux’s data infrastructure and transaction tools helped reduce friction and build trust between Palmetto and tax credit buyers. This was the case for both single transactions and for long-term relationships. In fact, two buyers who transacted with Palmetto through Crux have returned to do repeat deals, and future transactions are already in the pipeline for 2026.

Looking ahead: Repeat deals and a maturing market

Leveraging Crux, Palmetto has been able to recycle capital from its tax credits and fund the expansion of its business. Palmetto continues to engage in new transactions through the Crux platform — several of the counterparties from the original deals have returned to engage in follow-on transactions. This is a strong signal of confidence in Palmetto’s project quality.

More broadly, Palmetto’s experience demonstrates the importance of developing new relationships between buyers and sellers. With its connectivity to a large network of tax credit buyers and advisors, that’s a critical piece of the value that the Crux platform provides.

From experienced developers to first time tax credit sellers, Crux makes it simple to connect with buyers and monetize clean energy and manufacturing tax credits. Contact us to learn more.