Valuation of Commercial Projects


Commercial investments are more complex than personal investments, because the profit from the project is subject to income tax. A commercial solar photovoltaic (SPV) system must be evaluated differently from a home SPV system, for example, because the profit from the home SPV system does not increase the homeowner’s taxable income. The home-owner was using after-tax income to pay the previous electric energy bills (and sales tax on those bills), so a reduction in the expenditure for energy just means more income being available to spend on other things, not more taxable income in total.

In contrast, a business that owns a renewable energy system must pay income tax on the profits (revenues ...

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