Copper Filter Drier,Copper welding filter frier, baffle and mesh, Molecular Sieve SUZHOU YOUDE ELECTRIC CO., LTD. , https://www.unitekool.com
A photovoltaic (PV) system can change ownership several times during its 20-plus-year operational life. Each buyer and seller in these transactions may view the same project or portfolio from entirely different perspectives. In simple terms, the seller aims for the highest possible price, while the buyer seeks the lowest. Ideally, the final sale price will fall somewhere between both parties' initial price expectations. However, focusing on the technical aspects of the system is where the "real action" happens in negotiations. This article offers a guide for buyers to influence the price based on a technical risk assessment of the PV system.
Sellers usually initiate a Request for Proposal (RFP) to attract qualified buyers interested in purchasing either a single installation or a group of projects. The RFP typically includes high-level information about the assets. From there, interested buyers are screened and narrowed down to a select few, often referred to as the "shortlist." These shortlisted buyers gain access to more detailed technical information and are given a limited timeframe to review it, ask for clarifications, and submit their final bids. Sellers don't provide all the necessary details upfront, so buyers need to request specific documents. Buyers should request access to the site(s) and the following documents:
| **Item** | **Description** |
|-----------------------------------------|--------------------------------------------------|
| Engineered Drawings (Electrical/Mechanical/Civil) | Detailed blueprints and schematics |
| Solar Yield Models (PVSyst Reports) | Predictive models estimating energy output |
| Equipment Datasheets | Specifications and details about installed gear |
| Interconnection Approvals | Regulatory approvals for grid connection |
| Construction Permit Approvals | Legal permissions for building works |
| Commissioning Reports | Documentation of system testing and validation |
| Maintenance Logs | Records of system upkeep and servicing |
| Historical Energy Data | Past performance data |
There's usually a sense of urgency to finish the technical due diligence process. The buyer needs to be highly efficient to keep costs low if the acquisition turns out to be unfeasible. Conducting a thorough review demands a team with diverse expertise working collaboratively. The technical review team might include electrical engineers, civil engineers, construction managers, O&M technicians, asset managers, and performance analysts. Engaging a third-party, independent engineering firm with O&M experience is often a smart move for buyers aiming to complete these time-sensitive reviews efficiently.
### What to Expect from Your Third-Party Independent Engineer?
The independent engineer (IE) should deliver their services in stages, ensuring the process is comprehensive yet flexible enough to stop if the buyer decides the asset doesn’t fit within their risk tolerance. Breaking down the review process allows individual tasks to be completed and presented to the buyer, enabling discussions around high-risk observations. If the acquisition isn’t feasible, the buyer can terminate the review and avoid unnecessary spending on further due diligence. A typical technical due diligence process might look like this:
1. **Review of Equipment, Construction Permits, and Interconnection Approvals**
2. **Engineering Design Review and Solar Yield Assessment**
3. **Commissioning and Maintenance Log Review**
4. **Historical Energy Production Analysis**
5. **Physical Site Inspection**
In this structure, the IE can highlight critical issues early in the process, helping the buyer quickly decide whether to walk away from a poor deal. Common high-risk observations at each stage include:
- **Equipment, Construction Permit, and Interconnection Approval Review**
- Manufacturer out of business
- Missing or incomplete permits
- Non-compliance with interconnection standards
- **Engineering Design Review and Solar Yield Assessment**
- Design flaws requiring costly fixes or higher maintenance costs
- Code violations voiding warranties
- Unrealistic solar yield forecasts
- **Commissioning and Maintenance Log Review**
- Lack of proper commissioning or maintenance leading to warranty voids
- Installation flaws increasing operating expenses
- Benchmarks for energy and power production
- **Historical Energy Production Analysis**
- System or component underperformance
- Sources of downtime
- Accelerated degradation
- **Physical Site Inspection**
- Signs of accelerated wear and tear
- Installation discrepancies with as-built drawings
- New environmental impacts (shading, dirt buildup, vandalism, pests)
The independent engineer’s report provides an unbiased professional opinion on the risks tied to the acquisition. The buyer’s risk appetite should be clearly communicated to the IE for this opinion to be useful. All identified deficiencies should come with a risk assessment rating and associated capital expenditure needed to mitigate the risk. This is challenging for most IEs unless they have experience with PV system repairs. Buyers need accurate estimates for repair efforts, annual O&M budgets, and other capital expenditures to substantiate their offer price and negotiate effectively with the seller.
By leveraging a structured technical review, buyers can significantly influence the price and ensure they're making informed decisions when acquiring a PV system.