Renewable Energy Cost vs. Value

As renewable energy projects are coming online at an accelerated pace, technology is being developed to significantly reduce costs. What happens when the same solar facility you built 4 years ago at $300MM would cost $100MM to build today?

THE CHALLENGE

A solar energy client had a facility built a few years prior, and replacement cost new to build the same facility had cut almost in half. What happens when technology advancements change the replacement cost of a facility significantly? Does the taxable value remain the same?

THE APPROACH

Our team looked at the true replacement cost of the exact same facility, performed an aggressive analysis of the obsolescence to be applied to the asset, and utilized long-standing local relationships to avoid litigation or a lawsuit.

THE SOLUTION

We were able to secure a savings for the client of over $350,000 in property taxes by lowering the value of the facility by over $60MM. Had there not been an abatement in place, the tax savings realized would have been close to $1.4MM for one year.

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