CLIENT
Our client is a leading power producer and utility that serves communities in over ten countries, with over 32,000 megawatts in operation and over 5,000 megawatts under construction. The company trusts DMA to plan and manage property tax liabilities for energy projects at all stages of the project lifecycle under state and local assessing jurisdictions.
CHALLENGE
Our client was preparing to repower a group of Texas wind projects but had hesitation due to the uncertainty of a critical expense – property tax. As property tax is one of the largest expense line items for renewable energy projects, a reliable project feasibility study requires an accurate property tax forecast. The tax estimates were complicated by varying assessment methodologies, pending state legislation, potential local incentives, and capital expense estimates. Due to the changing legislative landscape and the multi-phased approach to the repower, the client required the ability to accurately analyze a variety of property tax liability scenarios.
SOLUTION
DMA provided dependable expense forecasts for each wind farm in the form of interactive property tax models. To ensure accurate forecasting, specialized subject matter experts were designated to various elements of the models:
- Property Tax: DMA’s Texas-based property tax consultants advised on local assessment methodologies.
- Legislation Impact: Our Texas-based counsel provided guidance on pending legislation with uncertain outcomes and property tax implications.
- Incentives: Our credits and incentives experts identified local economic incentive opportunities and projected their impact on tax rates.
Together, our renewable energy valuation specialists synthesized the team’s findings into forecast models that simulate multiple scenarios of assessed property values and taxes over the life of the projects. In addition to the tax scenarios, DMA provided memorandums regarding legislative status, incentive opportunities, and important considerations for each property tax scenario included in the tax model.
RESULT
The client’s development team gained a clear and detailed picture of potential impacts on future cash flows and tax revenue to the respective communities. With customizable model inputs and built-in scenarios of legislation, capital expenditures, and incentives, the client can continue to rely on and adjust forecasts as projects evolve to support internal financial planning decisions. DMA’s experts in each specialized area serve as an ongoing resource for the development team.
WHY DMA?
A partnership with DMA provides your renewable energy project with dependable forecast insight from a specialized team of complex property experts assigned to your project. Our property tax professionals work as an extension of your tax department, enabling informed decision-making to strategically minimize tax liabilities and preserve your return on investment throughout the stages of the project lifecycle:
- New developments and acquisitions
- Incentive negotiations
- Construction in progress review
- Initial and annual compliance accuracy
- Annual assessment review for property tax liability mitigation
- Ensure assessments reflect operational challenges
- Repowers, retirements, and disposals
DMA’s specialized expertise in valuing renewable energy, utility, and complex industrial assets uniquely equips developers to forecast and optimize property tax liability.
Renewable Energy Property Tax Services
Minimize tax liabilities and preserve ROI throughout the project lifecycle.