Technical due diligence of solar acquisitions
How does a firm evaluate the predicted energy capacity of an operating photovoltaic power plant (solar) it is considering purchasing? I'm talking about a scenario where the plant was built 7 years ago and the initial projection during commissioning can no longer be relied upon.
I know firms typically hire Independent Engineers to perform an assessment and I have a general idea of the methodology they use.
Full transparency, I'm a data scientist with experience at an MBB firm who's started a consultancy focused on replacing these IE's to assess the plant's production capacity. We've written code that allows us to predict the potential energy production more accurately and in a much more scalable way.
Interested in learning a little bit more -
i.e. What engineering firms do you use?
Maybe the assessments are instead just done in-house with some back-of-the-envelope calculations?
What have your experiences been like with the actual energy production compared to the assessment if your firm went ahead and completed the purchase?
Can't speak for buying operating solar farms and the success of the estimates, but used to work at a solar developer and we hired a data scientist to do exactly that - forecast actual production based on historical performance, technical specs and weather. Think most of the engineering firms i.e. DNV, (i'm aussie so Jacobs, Aurecon, GHD etc.) would provide forecasts and believe they could do so based on historicals as well.
I'd much rather a trusted engineering firm / solar forecaster give me a report with forecast yield so i can go to my IC and say "blah says X" than use heuristics, but heuristics will probably be used Day 1 on whether we should even contemplate commissioning reports and doing DD. Imagine some firms with internal technical capability will just do it themselves.
You obviously use an engr firm to come up wt production forecasts. Can't make them up out of your buttocks
Yes we use black and Veatch / DnV frequently. You can ask them to do a one year study, five or ten year. For the purpose of financing, lenders typically only look at one year study i.e. generation for one year.
Suscipit ex quam omnis culpa blanditiis quod eos atque. Excepturi ut ad numquam repellat. Perspiciatis fugiat laboriosam voluptas delectus quis non itaque. Commodi illo eveniet quos. Autem omnis voluptas veniam eaque autem. Quisquam ipsam optio enim similique perferendis.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...