Insights
Analysis of solar project finance, regulation and risk from SolarQuant, for developers, lenders and investors. The guide series below each start from a pillar guide and go deeper into one term at a time.
Solar project finance term sheets
- How to read a solar project finance term sheet: a modeller's guide
- Debt service cover ratios in solar project finance: the sizing, lock-up and default levels explained
- Lending to a solar project with many power buyers: how lenders assess a multi-offtaker portfolio
- Cash flow available for debt service in solar project finance: CFADS, DSCR and LLCR defined with formulas and a worked example
- How lenders size the debt of a solar project: gearing cap versus DSCR sculpting
- The cash flow waterfall in solar project finance: the order of payments and how to model it
- Short-term versus long-term solar project debt: mini-perm loans, full-tenor loans and refinancing risk
- Reserve accounts in solar project finance: debt service and maintenance reserves, and their alternatives
- The all-in cost of a solar project loan: base rate, margin, fees and hedging
- VAT and working capital loans in solar project finance: the facilities modellers forget
- Senior versus subordinated debt in solar project finance: drawdown order, pricing and ratios
- What a solar project must deliver before its first loan drawdown: conditions precedent as a roadmap to financial close
- Life after financial close for a solar project: reporting, covenants, model updates and events of default
- Solar project finance glossary: the term sheet terms a modeller needs
- Currency risk in a solar power purchase agreement: denominated versus paid, local-currency security and the FX true-up
Renewable energy certificates for solar projects
- How to read a renewable energy certificate sale agreement for a solar project: a modeller's guide
- Renewable energy certificate systems compared: I-REC, Guarantees of Origin and US RECs
- How a solar plant gets renewable energy certificates issued: registration, issuance and fees
- Renewable energy certificate trade agreements compared: I-REC, EECS GO, EFET and US master agreements
- Delivering renewable energy certificates: transfer, redemption and when title and risk pass
- Pricing renewable energy certificates: volume, vintage, spot trades and forward sales
- Failure to deliver or accept renewable energy certificates: replacement cost and termination amounts
- Registry, issuer and rule-change risk in renewable energy certificate sales: force majeure and change in applicable rules
- Tax on renewable energy certificate sales: VAT and other taxes
- What buyers need from renewable energy certificates: Scope 2 quality criteria, market boundaries and vintage
- Renewable energy certificates and carbon credits from the same solar plant: avoiding double counting
- Renewable energy certificate revenue in the lender's model: how much counts for debt sizing
- Renewable energy certificate glossary: I-REC, GO, REC and trade agreement terms
Solar PPA term sheets
- How to read a solar power purchase agreement (PPA) term sheet: a modeller's guide
- Take or pay and deemed energy in a solar PPA: who pays when the power is not taken
- Offtaker payment security in a solar PPA: letters of credit, guarantees and what lenders test
- Tariff and escalation in a solar PPA: flat, escalating and indexed prices in the model
- Utility, corporate and trader buyers in a solar PPA: how the offtaker changes credit risk, security and lender asks
- Termination payments in a solar PPA: debt-based, fair-value and lost-revenue approaches
- Commercial operation date, longstop dates and delay damages in a solar PPA: what a late plant costs the model
- Performance guarantees in a solar PPA: availability, output and shortfall damages in the model
- Delivery point, metering and grid charges in a solar PPA: where title passes and what it does to revenue
- Force majeure in a solar PPA: who bears the risk when events stop deliveries
- Change in law in a solar PPA: who bears new laws, taxes and levies
- Events of default, cure periods and the direct agreement: what lenders need from a solar PPA
- Conditions precedent in a solar PPA: what must happen before the agreement takes effect
- Invoicing and payment terms in a solar PPA: invoice cycle, late interest, set-off and working capital
- Forecasting and scheduling under a solar PPA: who bears forecast error
- Environmental attributes under a solar PPA: who owns the certificates and what they change
- Solar power purchase agreement (PPA) glossary: standard terms from tariff to termination in plain words
Individual articles