In order to secure financing for solar and energy storage projects, developers must first overcome the bankability challenge set by lenders. Bankability here is closely tied to investor confidence and the perceived risks associated with project returns. One of the most critical stages in this process is the due diligence conducted by an independent engineer (IE). The findings of this review can make or break a project, as poorly designed projects may face rejection even before they reach the final stages.
To avoid potential pitfalls, engaging an owner’s engineer (OE) early in the development phase is essential. Think of this as preparing thoroughly for a major court case. A seasoned attorney wouldn’t present a complex case without first conducting a mock trial. Similarly, a prudent project developer shouldn’t submit their designs to a lender’s due diligence without first receiving a thorough vetting from an OE.
This article delves into the common reasons why development designs fail during bankability assessments and highlights the benefits of having an OE review the designs upfront.
---
### Technology Selection and Qualification
For solar power assets, which are expected to operate for decades, product quality and reliability are paramount to investors. Developers need to substantiate reliability and performance claims with verifiable data.
When evaluating technologies, it’s crucial not to focus solely on upfront costs. While cost per watt is a key metric, sacrificing long-term value for short-term savings can prove detrimental. Losses in energy production over 30 years can outweigh the initial savings, leading to increased operational costs and reduced revenue. With the solar industry evolving rapidly, having expertise in current technologies is vital. Vendor selection and product specifications significantly influence a project’s risk profile. Be cautious of vendors offering outdated technologies at discounted rates, as this could signal financial distress.
Supporting claims with evidence is crucial. Without data backing performance claims, even the most promising innovations won’t pass muster. Investors and lenders expect rigorous validation, so it’s imperative to demonstrate expected gains in a credible manner. Trust, but verify with concrete data.
---
### Performance Model Review and Validation
The performance model forms the backbone of a project’s financial viability. However, it is often the source of issues during the IE review. These problems typically arise from limitations in the model itself or overly optimistic expectations.
Understanding the limitations of the model is critical. For instance, modeling a PV system with dual-axis trackers on a south-facing slope presents challenges. While the gains from dual-axis tracking can be modeled, combining this with the specific topography introduces complexities the model may not handle accurately. Certain real-world factors may remain unaccounted for, impacting financial feasibility.
Setting realistic expectations is equally important. During the design phase, stakeholders often treat the performance model as a tool for iterative refinement. While this helps optimize the design, it doesn’t always align with bankability standards. Lenders’ IEs consider additional variables, such as soil accumulation, weather variability, and system uptime, which can significantly reduce predicted outputs. Even minor adjustments can push a marginally viable project below acceptable thresholds.
---
### Engaging an OE Reduces Risk and Safeguards Margins
Lenders typically introduce an IE during the 30% design phase, when significant resources have already been invested. At this stage, a rejected proposal represents wasted effort and resources. To mitigate this risk, developers should engage an OE to pre-screen designs and models.
Pure Power, acting as an OE, identifies potential red flags that could lead to project rejection. By ensuring the model exceeds the lender’s minimum requirements, we build sufficient margins into the design. This conservative approach safeguards against unforeseen real-world issues, such as unexpected site constraints, which could otherwise jeopardize project cash flow.
By addressing these concerns early, developers can avoid costly delays and ensure their projects meet both technical and financial criteria. Preparing thoroughly and leveraging expert guidance can mean the difference between success and failure in securing project funding.
Rotatable Wall Fan
Although air conditioning and Industrial Fans are both cooling devices, the difference is still significant. The cooling effect of air conditioning is indeed better than other cooling equipment, but a series of problems such as high cost, high energy consumption, and inconvenient installation have become greater obstacles for enterprises to install and use air conditioning. Moreover, long-term use of air conditioning is detrimental to human health, and cleaning is cumbersome. In addition, air conditioning is not very suitable for some tall space places such as factories, farms, etc. However, if you want to improve the ventilation of factory buildings, there is a lot of smoke and dust The use of air conditioning not only fails to improve the ventilation effect of the factory environment, but also increases the economic costs of enterprises due to issues such as stuffy environment. Therefore, industrial fans have emerged, which are increasingly popular and loved by people due to their advantages such as large coverage area, easy cleaning, low noise, energy conservation and environmental protection.
Rotatable Wall Fan,Revolving Wall Fan,In-Wall Fan,Reversible Wall Fan
Julai (Chongqing) ventilation equipment Co.,Ltd , https://www.julaifans.com