Snapshot of Existing and New Photovoltaic Business Models
The photovoltaic (PV) sector has overall experienced a significant growth globally in the last decade, reflecting the recognition of PV as a clean and sustainable source of energy. Project investment has been and still is a primary financial factor in enabling sustainable growth in PV installations. When assessing the investment-worthiness of a PV project, different financialstakeholders such as investors, lenders and insurers will evaluate the impact and probability of investment risks differently depending on their investment goals. Similarly, risk mitigation measures implemented are subject to the investment perspective. In the financing process, the stakeholders are to elect the business model to apply and be faced with the task of taking appropriate assumptions relevant to, among others, the technical aspects of a PV project for the selected business model.
The Solar Bankability project aims to establish a common practice for professional risk assessment which will serve to reduce the risks associated with investments in PV projects.
The risks assessment and mitigation guidelines are developed based on market data from historical due diligences, operation and maintenance records, and damage and claim reports. Different relevant stakeholders in the PV industries such as financial market actors, valuation and standardization entities, building and PV plant owners, component manufacturers, energy prosumers and policy makers are engaged to provide inputs to the project.
The technical risks at the different phases of the project life cycle are compiled and quantified based on data from existing expert reports and empirical data available at the PV project development and operational phases. The Solar Bankability consortium performs empirical and statistical analyses of failures to determine the manageability (detection and control), severity, and the probability of occurrence. The impact of these failures on PV system performance and energy production are evaluated. The project then looks at the practices of PV investment financial models and the corresponding risk assessment at present days. How technical assumptions are accounted in various PV cost elements (CAPEX, OPEX, yield and performance ratio) are inventorized. Business models existing in the market in key countries in the European Union (EU) region are gathered. Several carefully selected business cases are then simulated with technical risks and sensitivity analyses are performed.
The results from the financial approaches benchmarking and technical risk quantification are used to identify the gaps between the present PV investment practices and the available extensive scientific data in order to to establish a link between the two. The outcomes are best practices guidelines on how to translate important technical risks into different PV investment cost elements and business models. This will build a solid fundamental understanding among the different stakeholders and enhance the confidence for a profitable investment.
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