Global Criteria for Solar Power Projects

Fitch Ratings has issued a new criteria report today focusing on global solar power projects. The criteria applies to a broad range of utility-scale photovoltaic (PV) and concentrated solar energy (CSP) plants, including greenfield or existing plants, individual or portfolio assets, fully contracted or merchant sales, and proven or less-established technologies. Fitch defines utility-scale projects as freestanding constructions or host-mounted structures that typically rate 10 megawatts (MW) of nameplate capacity or more.

The new report is released amidst the burgeoning development of utility-scale solar power where countries all over the world are rapidly adopting mandates to increase renewable energy. Fitch’s report includes credit implications that market participants seek to address for projects of this nature.

Fitch identifies the following as major risk factors for solar projects:

— Financial strength and experience of sponsors, particularly with newer technologies;

— Reliable and accurate third-party reports on scope and quality of a solar resource and project design;

— Experience and financial strength of construction contractor with similar projects;

— Terms of the construction contracts, and the complexity and time scale of the construction phase;

— Strength of warranties, guarantees, and insurance for project design, parts, and operations;

— Technology risk associated with the project; and

— Strength / weakness of the project cash flow stream.

Fitch will host a series of teleconferences the first of which will be on Tuesday, March 1st at 11am EST to highlight its global experience in the solar power project sector. Topics include ratings distribution, technology risk, geographic issues, Feed-in Tariffs, and how the company incorporates its ratings guidelines. Yvette Dennis, Director in the Global Infrastructure & Project Finance group will lead the call along with other senior members of the team. A Q&A session will follow their remarks.