Analysis

Analyses on wind and solar PV assets

April 2014

Deloitte Denmark’s Renewable Energy team updates their studies on market valuation of wind and solar PV assets. In addition to these studies is a paper that describes the key elements in a best practice business case analysis on wind power. The paper contains examples and benchmarks from more than 80 operating wind farms, 40 international market studies on wind farm economics as well as on our extensive experience from acting as financial advisor in more than 30 wind projects.

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A market approach for valuing wind farm assets – Global results

Based on a statistical approach we assign different values to the individual development stages of a wind farm project. We estimate an onshore installed capacity multiple of approx. EUR 1.7m per MW while the offshore installed capacity multiple is somewhat higher at approx. EUR 4.3m per MW.

Due the size of the dataset we have been able to illustrate and estimate the change in the transaction prices over time. We have found a high correlation between reports on decreasing project costs and transaction prices.

Transaction data details and geographical analyses can be ordered here.

Market approach for valuing wind farm assets

A market approach for valuing solar PV farm assets – Global results

Based on a statistical approach we assign different values to the individual development stages of a solar PV farm project. We estimate an installed capacity multiple of approx. EUR 3.3m per MW which is 6% lower than the estimate in last year’s edition of this analysis.

The decrease indicates dropping transaction prices on solar PV assets which we illustrate in a time analysis that shows how prices on installed capacity has dropped approx. EUR 1.7m per MW since 2011.

Transaction data details and geographical analyses can be ordered here.

Market approach for valuing solar PV farm assets

Establishing the investment case – Wind power

While the 2 papers above apply a market approach for valuation, this paper serves as a guide for a cash flow based valuation of wind projects. We believe that this paper is highly relevant as the sector growth rapidly and as proper business case analyses are important to wind farm developers and asset owners in order to understand project economics, profit opportunities and risks as well as secure financing of projects.

We take you through the key steps to consider when assessing a wind investment case and we give examples on key elements to include in the business case analysis.

Establishing the investment case
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