Due diligence

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5 min read

Solar Development Value Creation

Solar Development Value Creation

Someone offers you a ready-to-go project with a delicious IRR. Then you learn they only hold an LOI. Here is where development value is actually created.

Keith Cronin, founder of SunHedge

Keith Cronin · Founder, SunHedge

You’ve probably been approached before, being told by someone about a great solar project that is available for an acquisition. You’ve heard the economics look amazing with a delicious IRR. The project is ready to go and when are you ready to begin?

Digging further, you discover the person that shared this with you, has site control. You dig further and they have an LOI only.

Total buzz kill for you.

There is a mountain of risk still left on the table.

Uncertainty can sprout anywhere between permitting and interconnection (IX).

There are 9 stages to value creation (there are many sub-categories).

· Site Control

· Permit and IX applications

· Approval of permit and IX applications

· Verification of the equipment delivery

· Mobilization and development

· Mechanical completion

· Substantial completion

· Achieve COD and satisfy government agencies

· Utility PTO and closeout documents

If you are interested in selling your project or portfolio opportunity, the further you can de-risk the deal, the more economic value you’ll create for yourself and the more likelihood of interest from serious buyers.


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READY WHEN THE DATA ROOM IS

Have a project between LNTP and PTO? Send what exists today. You will know within two business days whether it is fundable, and what is missing if it is not.

WRITTEN BY

Keith Cronin, founder of SunHedge

Keith Cronin

Founder, SunHedge

Twenty years building, selling, and financing solar. Founder of Island Energy Solutions, President of SunEdison Hawaii, and instructor of the Solar Executive MBA.

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