Six Stages Of Solar Bankability

Aug. 26, 2012 - PRLog -- However, solar energy is not without challenges. To ensure the availability of capital for solar electric power generation, developers need to mitigate risks.

In this paper, we will examine the first five stages of solar development to see how the decisions made during the development process affect a project’s bankability. We will then take a look at a crucial sixth stage: customer enablement. This stage allows energy-conscious consumers to choose solar electric power and other renewable sources of electricity over more traditional sources.

The Solar Opportunity

The solar energy reaching the Earth’s surface is so great that in six months, it’s about equal to all of the energy that can be obtained from all of the Earth‘s non-renewable resources of coal, oil, natural gas and mined uranium combined. Theoretically limitless, the sun has an estimated life span of another 5 billion years and is one of the most passive forms of power generation with zero emissions.

Solar electric power has a great deal of appeal for investors looking at opportunities in the renewable energy market. The scalability and flexibility in locating a prospective PV power plant give distinct advantages over other methods of power generation:

• It is relatively easy to assess and forecast the availability of the resource.
• There is no variability associated with the cost of the main fuel.

Compared to other renewable sources of energy, solar PV is quick to deploy. A utility-scale solar PV plant can take 1.5 years as compared to an average of two years for onshore wind and up to seven years for a geothermal power plant, according to IHS Emerging Energy Research.

Rapid deployment makes solar an attractive solution for states and utilities scrambling to meet their respective renewable portfolio standards and keep up with increasing energy demand. This, in turn, provides an opportunity for investors and developers. Utility-scale solar electric power development does not face quite as many infrastructure concerns as other sources of energy. Since the sun shines to some degree everywhere on the planet, solar power plants can be placed relatively close to points of consumption, leveraging substations with excess capacity. Locating power generation close to the load results in lower losses due to transmission.

Bankability: The Challenge for Solar Developers
However appealing solar investment is, developers still need to assess investment risks by considering the following questions:

• Is the technology proven?
• Has the EPC demonstrated the ability to deliver the projecton-time and on-budget?
• What is the anticipated ROI?
• How quickly can the project start generating a return?

Generally speaking, bankability in the solar industry is a term used to describe the degree of financial risk. The degree of bankability of any project, solution, technology or supplier will affect the availability and cost of capital.

The decisions a solar developer makes during project planning, installation and commissioning can have a significant impact on a project’s risk and associated return. In this paper, we will break the project down into four stages:

1) Site and project assessment;
2) Design and optimization;
3) Procurement;
4) Installation and commissioning;

We will also look at two critical post development stages that continue to affect the project’s total operating costs and return:

5) Maintenance; and
6) Customer enablement.

To read entire article see http://www.solarpowerworldonline.com/2012/08/stages-of-so...

ECS offers clean energy solutions for project developers and financiers looking for sound  investment opportunities in clean energy projects. We offer a variety of services including but not limited to feasibility studies, project planning, risk assessment, technical design and engineering, project permitting, project management, and more. Contact us today to discuss your project.

Contact

Dallas Terry, LEED AP BD+C
Director, Earth Circle Solutions
Clean Energy Consulting
info@earthcirclesolutions.com
www.earthcirclesolutions.com
Tel:+1-641-919-5148