CLIENT
Our client is a growing company in the clean energy sector, dedicated to developing solutions that enhance the reliability and accessibility of renewable power. A central part of its strategy involves building Battery Energy Storage Systems (BESS), which store energy from renewable sources and help balance supply with demand. As the company expanded with a new BESS facility in California, it faced new complexities around how this type of project would be valued for property tax purposes.
CASE SNAPSHOT
| INDUSTRY | Energy |
| ASSET TYPE | Battery Energy Storage System (BESS) |
| JURISDICTION | Imperial County, CA |
| ASSESSMENT REDUCTION | $25,283,227 |
| FIRST-YEAR TAX SAVINGS | $272,270 |
Preventing BATTERY ENERGY STORAGE SYSTEM Overvaluation
During the facility’s first year of operation, the company’s finance and tax team faced a critical issue: California’s standard cost approach risked significantly overvaluing the stand-alone BESS. This method did not accurately reflect the system’s unique design, operational efficiencies, or its role in balancing renewable energy supply.
If left unaddressed, this overvaluation would have created an inflated property tax liability. The impact would have been substantial—placing unnecessary financial strain on the project and potentially limiting the company’s ability to reinvest in future renewable energy development. The client recognized the need for specialized expertise to address this challenge and ensure that the facility’s value was assessed fairly.
Defensible Valuation, Local Buy-In
DMA stepped in to provide both technical expertise and strategic guidance. Our team:
- Engaged directly with the local jurisdiction, opening a collaborative dialogue early in the process
- Prepared a comprehensive valuation memo that demonstrated why the Discounted Cash Flow (DCF) income approach was a more accurate methodology for the facility
- Submitted supplemental documentation alongside the return filings, further supporting the case with detailed financial and operational evidence
This proactive approach ensured that the assessor had a clear, data-driven perspective on the project’s true economic value.
Results that Power Future Projects
- $25.3 million reduction in assessed market value
- $272,000 in first-year property tax savings
- Forecasted long-term tax savings as valuation method scales
- Assessor accepted DMA’s DCF-based valuation analysis
- Methodology now applied to future renewable energy sites
Tax Expertise for Clean Energy Growth
The clean energy company partnered with DMA to leverage our deep expertise in property tax, valuation methodologies, and jurisdictional negotiations. We understand both the technical and practical aspects of valuing emerging technologies like BESS—and we know how to communicate that value effectively to assessors.
By combining rigorous analysis with jurisdictional expertise and proactive engagement, DMA not only reduced the client’s immediate tax burden—we also laid the groundwork for smarter, scalable valuation as their renewable energy portfolio grows.
Facing complex property tax challenges?
Contact DMA today to see how our expertise can help you save and protect your investments.