Comments Regarding Appraisal Model #2 for Solar and Wind Energy Projects
October 1, 2021
The Alliance for Clean Energy New York (ACE NY) and the New York Solar Energy Industries Association (NYSEIA) appreciate the ongoing efforts of the Department of Taxation and Finance (DTF) to develop a model for valuing wind and solar projects. We also recognize the complexity of valuing these projects. The release of Appraisal Model #2 on September 17, 2021 and DTF’s request for comments on this model is evidence of the agency’s continuing efforts.
DTF’s preparation of a discounted cash flow (DCF) model; the use of different discount rates for different technologies (i.e., wind and solar); and the recognition of projects with different contract structures (e.g., grid-scale vs. local (VDER) solar) represents progress in the development of a tool for valuing renewable energy projects. In our view, the model still needs significant changes to the proposed discount rates and to how the model predicts expenses and revenue in order to accurately reflect the appropriate valuation for property tax appraisal purposes and to be consistent with the Uniform Standards of Professional Appraisal Practice (USPAP). Absent significant changes, the proposed tax assessment model will likely lead to projects not being built; the related economic development opportunities not being realized in New York communities; and progress in meeting the New York’s renewable energy mandates not being made.