Solar Plant Invest Issue and Juggad Culture
2017-09-08

Oh, poor investor is my first thought when I see this picture. Bye bye with the IRR for at least 2-3 years.

This installation did not survive a normal storm and is damaged seriously. And now facing the battle between the developer, insurance company and himself.

How could this happen?

Guess you have your ideas. It is a combination of causes but at the end, you can bring them back to 1: saving money.

Recently PV Magazine held a round table discussion about this. And the conclusion is in the headline: spend a little to save a lot.

From many sources, we get information on projects in India and the conclusion is there have to be improved a lot to get the trust of the professional investors.

Many projects are for sale. Indian sellers say the projects are cheap. Is that so?

Don't think so. In our group, we recently did for more than 500MW health check in Europe for developers who want to sell their projects. Well, I can tell you most of the sellers get much less than expected.

Why, do you ask?

  • Now already known future warranty claims on the modules for several reasons (PID, LID, hot spot, delamination, junction box issues etc)
  • To less maintenance. At the end, this has to be caught up one day. And the investor is not paying your bad job
  • Future replacement costs. Bad quality cables, rusting materials (cheap galvanized) and so on
  • Technical design mistakes. Inverters which does not match the modules and therefore underperform, wrong cabling etc

All above is applicable for existing (and new) projects in India. And sorry but Jugaat is not making investors happy. Cheap projects can be extremely expensive in this way for investors.

That is also why experienced investors demand a health check. Spending a little to save a lot.

And for new projects a full due diligence. Yes, they do your work all over again by specialists.

Back to bankability. All above is part of it. Bankability is a complex topic but can also be made simple: Is an investor willing to give you money to realize your project?

Risk mitigation is key in this:

  • Insurances play a key role in this
  • A good insurance is only available when certain quality control took place by third parties
  • And you only pass when there are no shortcuts

Here is the circle round: no quality no money for your project. Basically, that is bankability

Spend a little to earn more is my advice to the developers in India.

Success

Oh, poor investor is my first thought when I see this picture. Bye bye with the IRR for at least 2-3 years.

This installation did not survive a normal storm and is damaged seriously. And now facing the battle between the developer, insurance company and himself.

How could this happen?

Guess you have your ideas. It is a combination of causes but at the end, you can bring them back to 1: saving money.

Recently PV Magazine held a round table discussion about this. And the conclusion is in the headline: spend a little to save a lot.

From many sources, we get information on projects in India and the conclusion is there have to be improved a lot to get the trust of the professional investors.

Many projects are for sale. Indian sellers say the projects are cheap. Is that so?

Don't think so. In our group, we recently did for more than 500MW health check in Europe for developers who want to sell their projects. Well, I can tell you most of the sellers get much less than expected.

Why, do you ask?

  • Now already known future warranty claims on the modules for several reasons (PID, LID, hot spot, delamination, junction box issues etc)
  • To less maintenance. At the end, this has to be caught up one day. And the investor is not paying your bad job
  • Future replacement costs. Bad quality cables, rusting materials (cheap galvanized) and so on
  • Technical design mistakes. Inverters which does not match the modules and therefore underperform, wrong cabling etc

All above is applicable for existing (and new) projects in India. And sorry but Jugaat is not making investors happy. Cheap projects can be extremely expensive in this way for investors.

That is also why experienced investors demand a health check. Spending a little to save a lot.

And for new projects a full due diligence. Yes, they do your work all over again by specialists.

Back to bankability. All above is part of it. Bankability is a complex topic but can also be made simple: Is an investor willing to give you money to realize your project?

Risk mitigation is key in this:

  • Insurances play a key role in this
  • A good insurance is only available when certain quality control took place by third parties
  • And you only pass when there are no shortcuts

Here is the circle round: no quality no money for your project. Basically, that is bankability

Spend a little to earn more is my advice to the developers in India.

Success