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How To Achieve The Highest Long-Term PV Project Values
How To Achieve The Highest Long-Term PV Project Values
Laura Stern
President and Co-Founder
Nautilus Solar Energy
November 2017
Optimizing PV Project Value
5
PV Project Value
o “Value” has different meanings for different parties at various stages of a project’s life cycle
o Original developer
o COD Owner, if different *
o O&M/Asset Manager
o “Exit” Owner *
• Budget vs. Actual – Assumptions, as much as performance, drive returns during each period
of ownership
• A project’s value, in terms of operational assumptions, are only as good as its worst year of
performance
• Asset Manager/O&M Provider may have the longest-term involvement with a project
4
Project Challenges – Know what to expect and expect unknowns
• With increasingly lower PPA and SREC revenues, operating costs impact
returns more directly than ever before
• Separate fixed from variable costs
• Know which variable costs will be incurred annually, but whose scope is
Add chartoutside
of service provider’s control
• Considerations that drive up operating costs/watt – size, distance to nearest
city/availability of local technicians, financing structure, # of project entities,
# of offtakers
• Focus on driving costs down over the operating life of a project
AP/AR
Financial KPI Management
calculation Tax & Audit
(DSCR, IRR)
“Solar
Warranty Regulatory
Management monitoring, maintenance management
and financial/compliance
management from multiple
Operating providers increases
Contract
Budget management time and cost. compliance
Management
Add the market variability,
regional policy and
incentive parameters and
Insurance
claims disparate asset stakeholder Incident
handling
management groups and what emerges is
the gross inefficiency of
Loan & Tax
most solar asset services Owner’s
Equity offerings to meet the activities
management management
demands of today’s solar
Cash flow
investor needs.” PPA & Site
Lease
management
Warranty management
management
Asset Management - Rent or Buy?
• Lack of available public data on failure rates and systemic issues inhibits
the development of best practices across the industry
• Industry is too fragmented and protective of information to develop a body of
knowledge
• Leads to too much ”starting from scratch”
• Work validation – how to verify that the work has been done
Where is the market going in 2018 & beyond?
Total Installed Capacity triples by 2022, reaches 16 GW annually
Source: SEIA/GTM
Research U.S. Solar Market
Insight
Solar Growing Coast to Coast
Thank you!