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It’s everybody’s game
New power generation continues to grow, with the lion's share of this growth coming in the form of wind, solar and other renewable energy sources. This growth is nothing new for power and utilities, who are expanding their portfolios on this front. More and more, we’re seeing companies outside of the traditional energy space looking to get in the game.
From rooftop solar and wind turbines, to energy storage and micro-generation—renewable energy and other emerging technologies have become a viable playing field for not only power and utilities, but corporations looking for new ways to evolve their business. We can help with:
- Traditional power and utility companies become the platform or connector to all these new or growing players in the energy space.
- Companies outside the traditional energy industry looking to expand their renewable strategies take the next steps.
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Deals
Renewables continue to drive significant deal activity for power and utility companies. Whether it’s a desire to diversify portfolios or a push to take advantage of the relatively short window remaining for government incentives, there are several factors influencing the activity. And there are significant opportunities and challenges to face. From the beginning stages of market assessment and project due diligence, to post-deal valuation and integration, companies and investors don’t have to go it alone. We can help you navigate renewable deals at every stage, with services including:
- Renewable energy strategy consulting
- Valuation
- Due diligence
- Modeling
- Tax structuring
- Post-deal integration
- Accounting Advisory
Do you have a question for us?
Repower
As a growing number of wind power facilities age, companies are analyzing the potential for “repowering” these older units by replacing used equipment with new equipment (such as a new wind turbine) to re-qualify for production tax credits and take advantage of new equipment efficiency gains. The clock continues to tick on this effort, particularly for those seeking to take advantage of the tax incentives before they fully phase out. We can help you answer the right questions and perform the right analysis in your repower efforts. Our services include:
- 80/20 test repower valuation
- Quantifying expected economics
- Determining how tax attributes will be utilized along with the supporting tax structures needed
- Analyzing possible accounting impacts
- Executing wind repowering after investment decision
- Supporting financial due diligence
Do you have a question for us?
Sustainability strategy
Trying to future-proof your business by making it more resilient? Want to demonstrate to customers and stakeholders that you are part of the solution? Working to make your company more attractive to investors? You’re not alone. More and more, companies are recognizing the importance of having an environmental, social or governance strategy. To achieve your strategic goals, you’re changing how you connect with the world around you. This may mean changing how your company uses or generates energy (eg. moving from renewables to microgrids) or tackling broader issues such as diversity,water stress and even customer privacy. Our clients are developing long-term goals, implementation roadmaps and operating models to drive performance. We can help.
- Sustainability strategy and execution support
- Climate risk assessment and disclosure
- ESG reporting considerations
Do you have a question for us?
Tax
With the step down of the Investment Tax Credit quickly approaching at the end of this year, investors have a short window of opportunity to qualify for higher levels of ITC, and developers are focused on meeting the begun construction requirements and moving projects forward to capture higher levels of tax credits. With this comes several tax considerations. We can help you work through the following:
- Tax equity modelling and structuring
- Review of tax equity models in deals
- Tax cost segregation
- Tax compliance and documentation
- Technical termination and step-up analysis and impact on deal value
- HLBV/IFRS analysis of tax equity structures in a deal context
- Tax due diligence of renewable projects
- Acquisition and disposition tax structuring
Do you have a question for us?
Accounting and reporting
Renewable ventures typically create a variety of accounting considerations for companies and investors that prepare US generally accepted accounting principles (GAAP) financial statements. These considerations include which party, if any, consolidates the venture, how the venture’s earnings are allocated among its members and how the ITC is recognized. We can help you navigate any questions or challenges that arise, including:
- Consolidation considerations
- Earnings allocations
- ITC recognition
- Leases accounting guidance
- Technical accounting advice
- Accounting and reporting for Hypothetical Liquidation at Book Value (HLBV)
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Emerging trends
The pace of technological change is not slowing down, and there is certainly no shortage of technologies to consider. But knowing where to place your bets is never easy. Whether it’s integrating renewables into the grid or developing new business models to support new technologies, there’s much to consider on the path forward.
For instance, the rise of technology and alternative modes of transportation tied to smart mobility promises to cause disruption throughout many industries. The expected growth is prompting many to consider, develop or test incorporating connected, autonomous, shared or electric technologies as part of smart solutions for their companies. Meanwhile, across the board, the regulatory environment to support an accelerated adoption of many new technologies (including electric vehicles, battery storage and renewables) remains uncertain.
We can help you navigate this changing environment, set a strategy and determine how emerging technologies can help you reach your goals. Ask us about:
- Advancing smart mobility (electric vehicles, etc.) in your community or business
- Rethinking business models to embracing emerging technologies
- Using emerging technologies to reach renewable goals
- Developing partnership and investment strategies
- Reacting strategically to market trends
- Evaluating rate-making strategies
- Identifying private sector opportunities in smart cities
Do you have a question for us?
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Michael (Casey) A. Herman
Energy, Utilities and Resources Co-Leader; US Power & Utilities Leader, PwC US
