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Solar Project Due Diligence: Financial, Legal & Technical Requirements

Event Description and Agenda:

Solar development is experiencing a steep growth curve all over North America, including the Mid-Atlantic and Southeastern United States, thanks to increasingly aggressive state energy policies, technological advances, innovative financing models and maturing market conditions. As a result, the need for quality, systematic due diligence is essential. Without proper due diligence, a minor issue can trip up those new to solar, and even industry veterans. While all phases of the solar project development require this scrutiny, systematic due diligence is especially critical for those entities inexperienced in developing or partnering in solar projects.

This instructional symposium will focus on the core financial, technical and legal areas of due diligence for PV projects. The due diligence "blueprint" is applicable to utility scale, commercial as well as large residential-scale projects. It will cover aspects of solar project development not tackled by other solar programs that focus strictly on a single due diligence issue, such as financing. The program will provide essential guidance to those who wish to inform themselves and their staff on how to gauge the soundness of the prospective project or partner they're evaluating in concert with their finance structuring and arrangement(s). The instructors are all experienced, seasoned subject matter experts with many successful projects in their portfolios.

 

Tuesday, June 16, 2015

12:30 - 1:00 p.m. :: Registration

1:00 - 2:00 p.m. :: Overview: Identifying Key Issues, Questions, and Features
  • Overview of the due diligence process
  • Purpose, key issues
  • Organizing the process
  • Review of physical project
  • Real property due diligence
  • Review of project contracts
  • Review of permits and approvals
  • Environmental
  • Energy production analysis
  • Putting it all together

Rich Cogen, Partner, Nixon Peabody

2:00 - 3:00 p.m. :: Review of Financial Metrics
  • Risk profile
  • Tax and subsidy drivers
  • Example of construction / permanent financing structure
    • Debt
    • Tax equity
    • Cash equity
  • Market drivers and relationship to profitability
  • Winners and losers

Joe Ritter, Vice President-Originations - Production/Acquisition, Seminole Financial Services, LLC

Jim Duffy, Partner, Nixon Peabody

3:00 - 3:30 p.m. :: Networking Break

3:30 - 4:30 p.m. :: Review of Contracts and Relationships
  • General structure
    • Utility scale
    • Distributed generation
  • Attributes of the financeable contract
  • Real estate and contract details
  • EPC
    • Equipment procurement
    • Equipment warranty
  • Power Purchase Agreements (PPA) / transmission
  • Operations and maintenance
  • Permits and approvals

Rochelle Rabeler-Griffiths, Partner, Holland & Hart LLP

4:30 - 5:30 p.m. :: Solar Assessment and Energy Production Report
  • Solar assessment
    • Portfolio impacts
  • Probability of exceedance
    • Calculations
    • Drivers
  • Estimation of energy production
  • Rating agency requirement

Marie Schnitzer, Vice President of Consulting Services, AWS Truepower, LLC

 

Wednesday, June 17, 2015

8:00 - 8:30 a.m. :: Continental Breakfast

8:30 - 9:30 a.m. :: Environmental and Permitting Concerns

This discussion will identify how the following issues can contribute to time, expense, mitigation, and other impacts associated with projects, or result in fatal flaw(s):

  • Zoning and entitlement
  • NEPA / CEQA
  • Community issues
  • State and federal wildlife laws
  • Water use and wetlands
  • Mitigation
  • Cultural resources
  • Native American consultation
  • Additional considerations
    • Location
    • Size
    • Project design
    • Construction
    • Operations and maintenance

Elisha Back, Principal, TRC

9:30 - 10:30 a.m. :: Land Title Searches and Insurance
  • Understanding the basics
  • Invalid Contracts
  • Uninsurable interests
  • Time constraints
  • Mineral coverage
  • Mechanics lien coverage
  • Gen-tie challenges
  • Land use restrictions
  • State law
  • Encroachment coverage
  • Integrated whole implications
  • Unique landlords
  • Home office approval

John Agle, Director - Energy Group, First American Title - NCS

10:30 - 11:00 a.m. :: Networking Break

11:00 a.m. - 12:00 p.m. :: Third-Party Independent Project Review
  • Key considerations
  • Reasonable design
  • Construction
  • Operations and maintenance plan and procedures
  • Key projects agreements
  • Environmental review
  • Insurance policy due diligence and risk assessment

Joe Brotherton, President, MaxGen Energy Services, LLCs

12:00 - 1:15 p.m. :: Group Luncheon

1:15 - 2:15 p.m. :: Considerations for Interconnection and Transmission
  • Broadly applicable issues
    • Interconnection studies
  • Voltage considerations for system sizes
    • Distance
    • Gen ties
  • Load flows
  • Changing interconnection standards
    • Requirements for interconnection
    • Ramping
    • Balancing
    • Reactive / voltage control
    • Metering and telemetry
    • Interconnection procedures
  • Distribution vs. transmission level
  • Application process and costs
  • Timing
  • Financial security postings
  • Interconnection agreement execution
  • Network vs. direct assignment upgrades
    • Curtailment issues
  • Economic / congestion
  • Emergency / dispatch down

Gary Brown, Director - Development, ZGlobal

2:15 - 3:15 p.m. :: Long-Term System Performance, Operations, and Maintenance
  • Preventive and corrective maintenance
  • Non-intrusive methods
  • Spare parts
  • Warranty management
  • Security and surveillance
  • Vegetation control
  • Washing
  • Monitoring programs and E-Tags
  • Training
  • Vendor partnerships
  • Other long-term considerations
    • Insurance
    • Land leases
    • Taxes
  • Performance guarantee and reliability

Michael Moone, Director - Energy Assurance, SunPower Corporation

3:15 - 3:30 p.m. :: Afternoon Break

3:30 - 4:45 p.m. :: Risk Assessment, Risk Allocation, and Performance Guarantees

This panel will discuss the following essential risk-related elements associated with conducting due diligence for establishing business and counterparty relationships engaging in PV project development:

  • Natural hazards
    • Location in a high-hazard zone (earthquake, flood, or windstorm)
    • Availability of insurance
    • Cost of insurance
    • Impact on lenders interest
  • Contingent exposures
    • Lenders
    • Delays in delivery of key components
    • Potential loss of tax credits
    • Project o Inability to sell power if off-taker interconnection is damaged
  • Lender expectations
    • Full limits
    • Low deductibles
    • Cost-effective program
    • Claims paid on replacement-cost basis (declining costs for solar)
    • Stipulated loss insurance if loan exceeds replacement costs
  • Insurance market - availability of insurance

Will Persyn, Vice President - Property & Casualty, Willis

4:45 p.m. :: Conference Adjourns

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