Project Finance to Procurement and Beyond

The utility PV market is scaling rapidly and represents a growing opportunity for solar project developers, particularly in North America. Many states, not just California, have shifted focus for renewable portfolio standards to include large central scale PV generation as a complement to natural gas and other renewables. With this growth have come quite a few growing pains as project developers attempt to better understand the needs of utility procurement and how to prove high probabilities of success to an essentially risk-averse customer.

Politics plays a major role in many aspects of solar project development, but perception plays a larger one. Sensitivities exist around the intricacies of project financing, which can cast doubt and confusion around ownership and developer commitment to projects. Yet developers must ensure low-cost capital to finance projects in order to remain competitive, which often means seeking outside investors.

In addition, developers are often challenged during the procurement process to adequately address concerns. The somewhat archaic utility RFP process and its inherent lack of visibility on timing and priorities leaves developers in the dark on key issues such as understanding importance of project value versus price. Similarly, developers need stronger communication channels with utilities with powerful community stakeholders looking to drive local economic development or create jobs.