What are the primary reasons that owners or investors might engage in appraising renewable energy plants? To answer that question, we need to first determine the difference between appraisals and valuations. While these terms often appear synonymous, they are not. An appraisal is technically an estimate or an opinion of a property’s current market worth, considering what the market is responding to and other factors. Quite often an appraisal is done for a plant’s equipment, land, buildings, etc. and if done for an entire plant, is normally done for one that is shut down. On the other hand, valuations, sometimes called business appraisals, are properly defined as written reports prepared placing a reasonable market value on a going concern business or a planned start-up company. To learn more about valuations see “Appraisal and Valuation Services for Renewable Fuels Industry” and “Appraisals for Expert Witness Engagements and Estate Tax Purposes”.
So for our purposes, let’s talk about appraising renewable energy plants in terms of equipment appraisals are done for one of the following reasons:
- Fulling some financing need such as investor or bank requirement.
- Accounting and tax matters, such as helping determine capital gains or losses,
- Ownership division or disposal, such as plant sales or buying out partners; general asset management.
- Insurance purposes, such as establishing replacement costs or other insured values.
- Liquidation and bankruptcy
- Management Planning and general asset management
There are relatively few professionals with significant expertise in measuring the value of bioeconomy businesses and assets. Experts in appraisal of renewable fuels business and plants must have substantial and specialized economic and engineering capabilities, in addition to the general and specialized appraisal capabilities. These skills include business appraisal, machinery and equipment appraisal and real property appraisal capabilities. The appraisers ought to be designated by the American Society of Appraisers or the Appraisal Institute and may require state licensure. They should be ASA Certified Sr. Appraisers in Machinery & Equipment as well as other specialties, and Certified Business Valuations Experts, as well as designated subject matter experts in biofuels/renewable fuels, biomaterials, biomass and biomass power, feedstocks, biotechnologies and a variety of specialty services. The expertise encompasses things like ag biotech, agricultural waste, alcohol fuels, algae biofuel, alternative proteins, animal-free products, beverage fermentation, bio-based chemicals, biocatalysis, biodiesel conversion, biogas production, biomass power, carbon intensity, co2 utilization, combined heat & power, conversion technologies, enzyme technologies, ethanol gas, Fischer Tropsch, food waste, fuel additives, green energy grants, hydrothermal carbonization, industrial enzymes, industrial fermentation, landfill management, microbial fermentation, organic synthesis, plastic pyrolysis, plastic recycling, plastic waste, pyrolysis oil, railroad ties, reactor design, recycled plastics, and renewable energy finance.
Lee Enterprises Consulting is the world’s premier bioeconomy consulting group, with over 100 highly qualified experts serving in all these areas. Take a look at our experts and the services we provide. Most of our experts are also available to advise and serve as expert witnesses in bioeconomy litigation matters. For the larger projects, we specialize in putting together full service, interdisciplinary teams with one point of contact. Call us at 1+ (501) 833-8511 or email us for more information.