Serving the energy industry for over 30 years
By - Jon Brown

Renewable Energy Appraisals and Cost Segregation
November 18-19, 2020 | Online :: Central Time

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Overview

This 1½ day symposium will examine the dominant appraisal methodologies applied to renewable energy projects.  It will review the income approach, dissecting salient features that drive the all-important measures relied on for transaction negotiations and execution.  The program will distinguish appraisal nuances among the various classes of renewable energy project types, as well as accounting for differences in used, mature and re-powering assets vs. new project assets.  Finally, it will consider what boundaries roles that different parties  –  project developers, investors and sponsors, lenders and advisors  –  play in the formulation of a sound, enduring appraisal.

Learning Outcomes

  • Review the three approaches to value of an appraisal
  • Explore the role of an appraisal in M&A and tax equity financing transactions
  • Assess the manifold externalities that can affect the appraisal
  • Analyze fair market value for debt underwriting purposes
  • Examine appraised values for tax equity investment purposes
  • Evaluate the distinctions between cost segregation and cost certification studies to assign costs appropriately
  • Discuss the use of appraisals for property tax purposes
  • Identify prominent distinctions in appraisals between various renewable energy resources and their development cycle

Credits

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EUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).  In obtaining this accreditation, EUCI has demonstrated that it  complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard.

EUCI is authorized by IACET to offer 1.0 CEUs for this event.

 

Instructional Methods  

This program will use PowerPoint Presentations and group discussions. 

Requirements For A Successful Completion Of Program  

Participants must log on each day and be in attendance for the entirety of the course to be eligible for continuing education credit. 

Agenda

Wednesday, November 18, 2020 Central Time

8:45 – 9:00 a.m. :: Log In

9:00 – 9:15 a.m. :: Overview & Introductions


9:15 – 10:30 a.m. :: Anatomy of an Appraisal

    • Purposes of an Appraisal
      • Property Tax Appeals
      • Financial Reporting
      • Insurable Values
      • Litigation Support
      • Strategic Management Discussion
      • M&A Transactions / Tax Equity Financing
      • Asset Re-powering
    • Three Approaches to Value
      • Income Approach
      • Cost Approach
      • Sales Comparison/Market Approach
    • Typical Standards of Value
      • Fair Value
      • Fair Market Value
      • Fair Market Value in Continued Use
      • Orderly Liquidation Value
      • Forced Liquidation Value
    • Factors that Can Affect the Appraisal
      • Local, State, Regional and Federal Regulatory and Environmental Polices
      • Global Supply Chain and Project Components
      • Tariffs, Market Disruptions and Other Externalities
      • Industry Trends that Affect Other Grid or Generation Options
      • Technology and Yield Enhancements

10:30 – 10:40 a.m. :: Morning Break


10:40 – 11:50 a.m. :: Analyzing the Cost Approach

  • Indirect Method
    • Sources
    • Application
  • Direct Method
    • Sources and applications
    • NREL
    • SNL.com
  • Indirect vs. Direct Method
  • Useful Life
  • The three forms of depreciation
    • Physical Deterioration
    • Functional Obsolescence
    • Economic Obsolescence

11:50 a.m. – 12:00 p.m. :: Morning Break


12:00 – 1:15 p.m. :: Analyzing the Income Approach

  • Overview
    • Discounted Cash Flow Method
  • Evaluating project cash flows and inputs / assumptions
    • Operational characteristics / production
    • Sources of revenue
    • Operating expenses
    • Taxes
    • Depreciation
    • Net working capital
  • Calculating a discount rate
    • Calculation of the weighted average cost of capital (“WACC”)
  • Other considerations
    • Consideration of project location / power market construct by region
    • The level of risk associated with the cash flows
    • Post-PPA power price forecasting
    • Assessing Economic Useful Life
  • Critical inputs and assumptions
    • Independent Engineering report
    • Cost segregation analysis / report
    • Assumptions related to ITC / PTC

1:15 – 2:00 p.m. :: Break for Lunch


2:00 – 2:45 p.m. :: Analyzing the Market Approach

  • Application of the Market Approach in Appraisals
    • C&I Context
    • Residential, DG Context
    • Utility-scale Context
  • Guideline Companies
  • Secondary Market Sources
    • Resellers
    • Dealers
    • Distressed Purchases

2:45 – 3:30 p.m. :: Analyzing the FMV for Debt Underwriting

  • Loan-to-value (LTV)
  • Debt Coverage Service Ratio (DSCR)

3:30 – 3:45 p.m. :: Afternoon Break


3:45 – 5:15 p.m. :: Analyzing Appraised Values for Purposes of Tax Equity

  • Evaluating and Deciding on Appraiser
  • Tax Equity Credit Insurance
  • Effect on Financial Model

5:15 p.m. :: Program Adjourns for Day


Thursday, November 19, 2020 Central Time

8:45 – 9:00 am :: Log In


9:00 – 9:45 a.m. :: Assigning Costs Appropriately

  • What is a Cost Segregation Study?
  • MACRS Eligibility
  • Depreciation
    • Different from Appraisal Depreciation
  • What is a Cost Certification Study?
    • ITC/PTC Eligibility and Basis Determination
  • Differences between Cost Seg and Cost Cert
    • Direct Costs
    • Indirect Costs
  • Alta Wind Legal Precedent
  • California Ridge Legal Precedent
  • CARES Act impact on Cost Segregation Studies

9:45 – 10:30 a.m. :: Prominent Distinctions in Appraisals between Various Renewable Energy Resources

  • Solar, Wind, Biomass, Other
    • Technologies and Deployment Scenarios
    • Estimated Normal Useful Life (“NUL”)
    • O&M
    • Capacity and Yield
    • Access to Point(s) of Interconnection (“POI”) and Proximity to Similar Resources
    • Types and Nature of Incentives

10:30 – 10:45 a.m. :: Morning Break


10:45 – 11:30 a.m. :: Accounting for Differences in Project Development Stage

  • Used
  • Mature
  • Re-powering Assets vs. New Property

11:30 a.m. – 12:30 p.m. :: Considerations in Evaluating a Property Tax Assessment and Estimating Property Taxes in an Acquisition

  • Introduction
    • Property Tax Overview
    • Tangibles vs Intangible Valuation
  • Case Law Overview
    • Discussion of Various State Cases
    • Are the plant and contract “inextricably” tied together
    • Criteria Used for Determining Intangible Asset Valuation
  • Other Criteria For Determining Intangible Asset Valuation
    • IAAO White Paper Overview
    • Appraisal Institute
    • Purchase Price Allocation
    • Other authorities and sources
  • Key Factors in Valuation for Property Taxes
    • Replacement Cost Trends
    • Sales Comparison Approach
    • Income Approach
    • 4th Opinion of Value (something unique to property taxation)
  • Other Factors and Considerations
    • Relationship with Assessor and Jurisdiction
    • Incentives
    • Tax Jurisdiction’s Diversity and Magnitude of Tax Base

12:30 pm :: Course Adjournment

Instructors

Shariff Barakat, Partner, Nixon Peabody LLP

Gary Blitz, Senior Managing Director/Co-Practice Leader, Aon Transaction Solutions

David Boisture, Partner, Novogradac & Company LLP

Bruce Cartwright, Managing Director – Property Tax Practice, Duff & Phelps LLC

Joseph Ritter, Senior Vice President, Seminole Financial Services, LLC

James F. Duffy, Partner, Nixon Peabody LLP

Tony Grappone, Partner, Novogradac & Company LLP

Camelia Miu, Acquisitions, Investments and Financial Advisory, Engie

Steven Munson, Senior Manager – Valuation Advisory / Transactions & Turnaround Advisory, CohnReznick LLP

J. Fernando Sosa, Director – Valuation & Advisory, Cushman & Wakefield

Patricia Tuite, Managing Director, Deloitte Advisory LLP

Caroline (Sieber) Walters, Director – Valuation Advisory Services, Duff & Phelps LLC

Online Delivery

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

  • You will receive a meeting invitation will include a link to join the meeting.
  • Separate meeting invitations will be sent for the morning and afternoon sessions of the course.
    • You will need to join the appropriate meeting at the appropriate time.
  • If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
  • The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Register

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all registrants for three business days after the event

Event Standard RateAttendees
Single Connection - Renewable Energy Appraisals and Cost SegregationUS $ 1295.00
Pack of 5 connectionsUS $ 5,825.00
Pack of 10 ConnectionsUS $ 9,715.00
Call us at 303.770.8800 if you have any specific questions on the volume discounts
* all other discounts do not apply to license packs

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Cancellation Policy

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before July 23, 2020 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

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