VALUATION OF…
Wind Farms
Utility-scale wind generation facilities, valued on power purchase agreement income, wind resource, and land rights.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Wind farms are valued primarily using the Discounted Cash Flow Method applied to the income generated under the power purchase agreement with the offtaker, in a manner analogous to solar farms, over the remaining term of the PPA and the operational life of the turbines.
Applying the Big Five framework, the Income Generating Unit is the generation facility as a whole, with income determined by contracted tariff and generation capacity; the discount rate applied reflects offtaker covenant, remaining PPA term, wind resource risk and turbine technology and maintenance risk, which is generally higher than for solar due to the greater mechanical complexity of wind turbines.
A Direct Comparison cross-check on a rate per MW of installed capacity, drawn from sales of comparable operating wind farms, should be used to test the primary DCF valuation, alongside the underlying land or servitude value where held separately from the generation asset.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Wind Farms — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.