Case Study: Renewable Energy

⬤ 01. Challenges

Maximizing Tax Savings in the Renewable Energy Sector: Overcoming Changing Replacement Costs

In the rapidly evolving landscape of renewable energy projects, the development of new technologies has led to significant cost reductions.

However, when the replacement cost of a solar facility decreases substantially, how does it impact the taxable value of an existing facility built years ago?

⬤ 02. Approach

Analyzing True Replacement Costs, Obsolescence, and Leveraging Local Relationships

To tackle this challenge, our team conducted a comprehensive assessment of the true replacement cost of the solar facility. We performed a meticulous analysis of the obsolescence factors applicable to the asset, taking into account the advancements in technology. Additionally, we capitalized on our long-standing relationships within the local industry to navigate the situation without resorting to litigation or lawsuits.

⬤ 03. Solution

Substantial Property Tax Savings and Mitigation of Financial Impact for a Publicly Traded Utility Company

Through our diligent efforts, we achieved exceptional results for our solar energy client. By accurately assessing the replacement cost of the facility and accounting for relevant obsolescence factors, we successfully lowered the value of the facility by over $60 million. This reduction translated into savings of over $350,000 in property taxes for our client. Considering that the abatement in place prevented even higher taxes, the potential tax savings for one year would have reached close to $1.4 million.

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