EnergyNewswatch

Renewable Energy Project Appraisals, Valuation and Cost Segregation Studies

Live Streaming Online April 3-4 | Online

An EUCI Program

Click Here to register $1295

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

Appraisals and cost segregation studies: project developers, investors and sponsors, lenders and other parties essential to these deals pin most of their proprietary decisions on this critical valuation component. 

This 1½ day symposium will examine the various dimensions that make a project “bankable”:

  • Dominant appraisal methodologies
  • Appraisal nuances among the various classes of renewable energy project types
  • Accounting for differences in used, mature and repowering assets vs. new project assets
  • Best practices for assigning costs appropriately through cost segregation studies
  • What boundaries and roles that different parties – project developers, investors and sponsors, lenders and advisors – play in the formulation of a sound, enduring appraisal
  • Impact of Inflation Recovery Act and other policy initiatives on appraisals and cost segregation studies

Project developers, investors and sponsors, lenders and other parties involved in renewable energy project development and M&A will glean compelling insights to ensure the formulation of sound, enduring best practices related to appraisal and related cost segregation studies.

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

Agenda

MONDAY, APRIL 3, 2023

1:00 – 5:00 p.m. Central Time

1:00 – 1:20 p.m. :: Overview & Introductions

1:20 – 2:45 p.m. :: Anatomy of an Appraisal

  • Purposes of an appraisal
  • Three approaches to value
  • Typical standards of value
  • Factors that can affect the appraisal
  • Post-IRA vs. pre-IRA considerations

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

James F. Duffy, Partner & Chair – Renewable Energy Tax Credit Team, Nixon Peabody LLP

Tony Grappone, Partner, Novogradac & Company LLP

2:45 – 3:00 p.m. :: Afternoon Break

3:00 – 4:00 p.m. :: Analyzing the Cost Approach

  • Indirect method
  • Direct method
  • Indirect vs. Direct method
  • Useful life
  • The three forms of depreciation

Tony Grappone, Partner, Novogradac & Company LLP

Patty Tuite, Managing Director, Deloitte & Touche LLP

4:00 – 5:00 p.m. :: Analyzing the Income Approach

  • Overview
  • Evaluating project cash flows and inputs / assumptions
  • Calculating a discount rate
  • Other considerations
  • Critical inputs and assumptions

Caroline Walters, Senior Director, Alvarez & Marsal

Mark Williams, Managing Director – Structured Finance Solutions Group, PNC Corporate & Institutional Banking

5:00 p.m. :: Program Adjourns for the Day

TUESDAY, APRIL 4, 2023

9:00 a.m. – 5:00 p.m. Central Time

9:00 – 9:45 a.m. :: Analyzing the Market Approach

  • Application of the market approach in appraisals
  • Guideline companies
  • Secondary market sources

Don Nimey, Principal – Valuation Advisory Services, CohnReznick

James F. Duffy, Partner & Chair – Renewable Energy Tax Credit Team, Nixon Peabody LLP

9:45 – 10:30 a.m. :: Analyzing the FMV for Debt Underwriting

  • Loan-to-value (LTV)
  • Debt coverage service ratio (DSCR)

Moderator: Tony Grappone, Partner, Novogradac & Company LLP

David Boisture, Partner, Novogradac & Company LLP

Joseph Ritter, Executive Vice President, Seminole Financial Services LLC

10:30 – 10:45 a.m. :: Morning Break

10:45 a.m. – 12:15 p.m. :: Analyzing Appraised Values for Purposes of Tax Equity

  • Evaluating and appraisal determination
  • Tax equity credit insurance
  • Effect on financial model

Moderator:  James F. Duffy, Partner & Chair – Renewable Energy Tax Credit Team, Nixon Peabody LLP

Tony Grappone, Partner, Novogradac & Company LLP

Corey Lewis, Managing Director, Aon Transaction Solutions

Camelia Miu, CFO, Nautilus

Mike Bammel, Managing Director & National Practice Lead – Renewable Energy, JLL Valuation Advisory

12:15 – 1:00 p.m. :: Lunch Break

1:00 – 2:15 p.m. :: Assigning Costs Appropriately

  • What is a cost segregation study?
  • MACRS eligibility
  • Depreciation
  • What is a cost certification study?
  • Differences between cost segregation and cost certification
  • Legal precedents
  • CARES Act impact on cost segregation studies
  • Distinguishing between different classes of renewable energy assets

Patty Tuite, Managing Director, Deloitte

Tony Grappone, Partner, Novogradac & Company LLP

2:15 – 3:00 p.m. :: Accounting for Differences in Project Development Stage

  • Used
  • Mature
  • Repowering Assets vs. New Property

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

James F. Duffy, Partner & Chair – Renewable Energy Tax Credit Team, Nixon Peabody LLP

3:00 – 3:15 p.m. :: Afternoon Break

3:15 – 4:00 p.m. :: Considerations in Evaluating a Property Tax Assessment and Estimating Property Taxes in an Acquisition

  • Introduction
  • Case law overview
  • Other criteria for determining intangible asset valuation
  • Key factors in valuation for property taxes
  • Other factors and considerations

Mark Simzyk, Managing Director – Tax Services, Duff & Phelps

4:00 – 5:00 p.m. :: Addressing the Impact of Externalities on Appraisals and Cost Segregation Studies

Panel Discussion

5:00 p.m. :: Course Adjournment
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