Renewable Energy: Onward and Upward

Bloomberg predicts that by 2040 zero-emission energy sources will make up 60% of installed capacity and that wind and solar will account for 64% of the 8.6TW of new power generating capacity added worldwide. Monetary incentives such as the U.S. Treasury’s 1603 Grants, Investment Tax Credits (“ITC”) and Production Tax Credits (“PTC”) along with state sponsored credits have done much to ignite the growth of the renewables industry in the U.S.

Since 2012, Marshall & Stevens has provided value opinions in support of development and investment in excess of $25 Billion of renewable energy projects, including Biomass, Fuel Cell, Geothermal, Wind ($13 Billion) and Solar ($9 Billion) energy generation.

Over the past five years, we have seen a diversification of the marketplace from mostly utility scale wind and solar projects and residential rooftop solar to an increasingly heavy concentration in portfolios of smaller solar power projects including distributed generation, commercial and industrial installations, community solar gardens, and more residential rooftops.

Despite the sunny industry outlook, there are lessons to be learned by some of the bumps in the road. A few solar developers put more focus on the sun setting of the 30% ITC in 2016 (extended in late 2015) than the economics of the projects they were purchasing only to find themselves teetering on insolvency. Lower on the radar are the ongoing battles between a few optimistic developers and the U.S. Treasury over the valuation (and allocation of 1603 grant dollars) of their projects; the same disagreements can be expected with the IRS over ITC valuations.

The fate of renewable energy investments, like in every other industry, can be directly linked to the quality and supportability of detailed valuation analyses based upon decades of experience. As independent experts in Renewable Energy valuation, Marshall & Stevens can help.

Experts in Renewable Energy Valuation, Project Analyses and Consulting

Since 2010, our Structured Finance / Leasing services professionals have provided valuations of over $50 Billion of traditional and renewable energy investments as well as the financing of significant equipment and facility investments in a variety of other industries.

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