KPMG + LandGate alliance helps renewable energy developers realize improved asset values with land valuations.
Learn more about KPMG's renewable energy real estate valuation service offerings as well as other tax, advisory, and valuation services supporting renewable energy developers and asset owners.
Powered by LandGate data, KPMG has helped utility-scale developers unlock substantial hidden asset value in their land developed with solar farms and energy storage projects. Our valuation services can help developers strengthen their balance sheet, leverage cheaper capital, and more strategically deploy solar and battery projects across the country
Solar Real Estate Valuation
Many solar landowners have limited visibility into the fair market value of the land associated with active solar projects. The cost-basis for solar land typically understates fair market value as the purchase price often reflects agricultural or raw land uses. Comparable sales of solar land are often difficult to obtain as it is uncommon for land associated with operating solar projects to be sold independent of the full solar system.
In conjunction with LandGate, KPMG is excited to provide utility-scale solar landowners appraisal services for solar real estate to estimate the FMV of solar land based on the fair market rent that an operating solar site could achieve in its local market. KPMG’s valuations are performed by state-licensed appraisers and are compliant with USPAP standards allowing solar landowners to understand the significant uptick in real estate value that is created during the solar development cycle.
LandCo Valuations
Solar developers have been increasingly focused on the real estate component of utility scale solar projects through the use of LandCo structures. Developers will purchase the underlying solar project land through a LandCo and sign a related-party lease with the ProjectCo.
LandCo structures allows the developer’s to both lower their debt financing costs and optimize the structure of rent payments over the project’s life. Powered by LandGate data, KPMG provides valuations that will assist developers with assessing any intangible asset value that may be created due to above or below market lease payments. Fair market rent studies that provide clients with a range of market rents can serve as guidelines when setting rent payments between ProjectCo and LandCo can also be performed.
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LandCo Valuation Case Study
A large utility scale solar developer, and current Landgate subscriber, engaged KPMG to provide a valuation of the underlying land for its fleet of operating solar projects. The project land was acquired over many years and the cost basis typically represented the acquisition cost of raw, unimproved desert or agricultural land. KPMG estimated the current market rent for land at each project and estimated the fair market value of the land based on its current highest and best use – solar energy generation. The results of the analysis led to a 400%+ increase in fair market value of the land when compared to the original acquisition cost, supporting a higher company valuation.
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About KPMG
KPMG’s solar real estate valuation team is a part of KPMG’s National Renewable Energy Group. KPMG provides tax, valuation, and cost-segregation services to renewable energy developers focusing on utility scale wind, solar, and battery storage projects.
About LandGate
LandGate provides advanced analytics for renewable energy M&A deals, market & price trends, operators’ benchmark and performance indicators, and more. LandGate’s database contains over 600 datapoints per land parcel for every parcel across the United States.
