The brand new report from Solar Bankability presents the best practice guidelines on how to account for the technical risks in the CAPEX, OPEX and energy yield estimation used for the PV cost modelling and financial models. The report follows up the findings of an extensive gap analysis that was published in July 2016, "Review and Gap Analyses of Technical Assumptions in PV Electricity Cost" that can also be found among our project
results. You can download the document here.
This report introduces a cash flow model as tool to measure the economic viability and profitability of long-term investments in PV projects. A detailed definition of total failure costs is provided and the specifications of a customised risk modelling tool which has been programmed especially for this modelling exercise is presented. Four representative business models are selected as basis for the modelling of technical risks. In the risk modelling exercise for each of the four business models the impact of technical failures is analysed. For each failure the failure category, the impact on the internal rate of return (IRR) and a detailed break-down of total failure costs in its sub-components is determined and the impact of the risk scenario (combination of technical failures) on the cumulative cash flow of the PV project is measured. A catalogue of suitable risk mitigation measures is also introduced from which the investor has to make an individual cost benefit analysis and define what budget he is prepared to invest in risk mitigation measures.
You can download the document here.