As renewable energy generation capacity continues to increase in the U.S. — due in part to state and federal incentives and tax credits—many of these benefits are coming to an end
What was once a novel technology seeking to rid the world of fossil fuel energy generation, is now transitioning into a mainstream (and viable) option for power generation companies who have benefitted for years from tax breaks and other credits to incentivize their operation. Wind turbines, which harness the kinetic energy of the wind, are used throughout the country to power communities and industrial facilities. As various incentives begin to dwindle while approaching the end of the incentive terms, asset owners may need to reassess taxable values.
Traditionally, the primary federal incentives available to power producers involved in the development of new wind farms are the Renewable Electricity Production Tax Credit (“PTC”) and the Business Energy Investment Tax Credit (“ITC”). Each has its own set of terms and benefits which were implemented by the federal government to promote growth of renewables, including wind.
The PTC incentive produces a federal income tax credit, which changes annually, for each megawatt of renewable energy generated and has a maximum term of 10 years. On the other hand, the ITC produces a one-time federal income tax credit equal to 30% of the total qualified costs of a new wind project. Both the PTC and ITC have similar time frames and phase outs in place for which new wind developments can take advantage of the incentives.
When these federal incentives come to an end, wind farm owners must face a potential (and likely unfavorable) discrepancy with market value and their ad valorem property tax assessments. This may require the expertise of an appraisal firm, like evcValuation, which has vast experience in the valuation of renewable generation assets and the effects that federal incentives have on value.
evcValuation brings to our renewable energy clients a vast amount of experience and knowledge of the value drivers at play when developing an appraisal for renewable energy facilities across the U.S. Our insight and experience allows us to serve the needs of clients in developing an independent and unbiased appraisal to help support appeals of ad valorem property taxes.
Contact evcValuation today at 262-788-9331 to explore your valuation options for renewable energy assets and depend on our reputation for excellence to serve your business needs.