Renewable Energy Asset Valuation

Download the Renewable Energy Asset Valuation insight here.

This insight presents important assumptions to consider for renewable asset valuation. The future will certainly bring further issues to light. We believe the best risk mitigants are always conservative assumptions. Sometimes during high volatility periods, such as the Covid-19 stock market crash in March 2020, the market offers such a discount that we can buy renewable projects with a comfortable margin of safety and below their private market valuations. But also in these periods, it is important to be aware of the pitfalls of renewable asset valuation and to not take advertised Net Asset Values or IRRs for granted as each case comes with its own 25 year or more forward-looking assumptions. Without knowing the assumptions behind the IRR, one cannot judge the risk that is imbedded in the promised return.