Independent reviews of large solar projects can uncover
associated hidden risks—or confirm confidence in the project
As solar projects increase in size and complexity, more elements of
project development and project construction become material to make
For smaller solar projects, the challenges that are faced by large
utility scale projects are often non-issues. The typical challenges for
large solar projects include, but are not limited to, permitting,
access to transmission, and technology risks that encompass warranty
and production guarantees. With smaller projects, there is typically no
performance guarantee, no need to access transmission since many are
behind the meter, and permitting issues are often limited to local
jurisdictional electrical or building codes.
For larger projects, the issues can grow exponentially from those
already mentioned to construction risks, supply chain management,
operations and maintenance, contracts, multiple subcontractors,
warranty, and technology risks, to name just a few.
The need for an independent review and assessment of project risk is
amplified based on the complexity of these issues and the risks
associated with each.
An independent review, which is often referred to as an independent
engineering review, provides an investor or potential investor,
developer, or other party the opportunity for an objective third party
to assess the attributes of a solar project. The specific focus
of the review or analysis is on the aspects of a project that could
result in lower revenues for a multitude of reasons and, therefore, the
return on investment risk. An experienced third party will review the
project for technical and commercial robustness. Many aspects of the
project will be addressed to ensure the cash flow over the project
life. However, the solar resource itself is often overlooked as a
critical component of this review.
A solar resource assessment will evaluate the quality of meteorological
data used to characterize the project site. For larger projects, a
properly managed on-site measurement program for a minimum of a year
will increase confidence, thereby decreasing the uncertainty of energy
production from the project site.
The quality of the long-term data set used in an assessment, be it
modeled or measured, and its proximity to the actual project site are
other factors that influence uncertainty around energy projections.
Poorly characterized seasonal and inter-annual variability can lead to
unexpected high or low energy production periods. These are only a
portion of the factors used by an experienced analyst to best
characterize the resource and energy potential at a project site.
An independent review is best completed by those with experience in the
field and expertise in solar resource and energy assessments.
Conducting this third-party review can uncover hidden risks associated
with projects or confirm confidence in the project. This can translate
into a more accurate assessment of the return on investment, a higher
likelihood of project success, and satisfied stakeholders.
Marie Schnitzer is the Senior Director of Investor and Solar Services
at AWS Truepower (www.awstruepower.com), an international leader and
innovator in renewable energy consulting and information services
providing solutions that support the full project lifecycle.