Many, but not all, preferred shares produce qualified dividend income that is taxed at a preferentialrate of up to 20% versus the ordinary-income rate of as much as 39.6%.
If there is going to be a preferentialrate for capital gains, people are going to try to structure as much of their income to take the form of capital gain as possible.
None of these taxes applies to renewables: thus renewables have a preferential tax treatment to fossil fuels and are subsidised because, recall, their whole case rests on the idea that a preferential tax rate is a subsidy.
Because the majority of income earned by a private equity fund is dividends and long-term capital gains both of which are currently subject to a preferential 15% tax rate these service partners can effectively convert what many believe should be ordinary compensation income taxed at 35% into investment income taxed at a mere 15%.