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Recommended practice for securing risks and performance during solar PV asset transactions

Help define the RESALE standard

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RESALE

DNV GL invites developers, investors, power companies, banks, yieldcos, pension funds and other financial institutions buying or selling existing PV power plant (portfolios) to join the RESALE consortium. Together, we will work on transactional issues of solar PV assets where the international community currently lacks agreement or guidelines. RESALE will leverage existing standards and fill the gaps to create a globally-recognised, transparent and coherent Recommended Practice.

Further growth of sustainable energy requires clarity and widespread ,agreement on issues concerning the secondary market for solar PV assets. To achieve this consensus and create industry standardisation, DNV GL has initiated the RESALE Joint Industry Project. This project aims to accelerate PV transitioning to an asset class1 through the creation of an official Recommended Practice for Asset Optimisation and Technical Due Diligence. Having broad industry support, RESALE’s international consortium will have the overview, knowledge and authority enabling stakeholders to step up and take action.

Join the RESALE consortium 
RESALE focuses on setting up guidelines for two main aspects of secondary market for solar PV assets: risk and performance (see figure). RESALE’s scope goes far beyond that of any existing standard. It currently is impossible to combine existing standards to achieve a single Recommended Practice – since they have wildly differing scopes and do not cover the many of the unique aspects associated with operating PV plants. Instead, RESALE will create a single standard that expands on existing standards to cover and link all aspects relevant for the secondary market for solar PV assets. 

Resale scope

Proactively shaping the market 
RESALE aims to:

  • enable the risk and performance issues associated with ownership transactions of operating assets to be managed in a robust and cost-effective manner;
  • provide confidence in risks and performance to the various stakeholders (e.g. investors, insurance companies, banks, pension funds, etc.);
  • deliver the above within a result-oriented, efficiently managed, fast-track project.

Short term benefits for participants 
For PV plant (portfolio) stakeholders it is essential to determine future performance, to uncover potential field failures and to capture measures for optimization. The PV plant (portfolio) has typically turnovers in ownership at 5-10 years, driven by the fact that the first O&M period and the warranty period ends or, in e.g. USA, by the fact that tax benefits end after such period. Due to its age certain classes of risks, i.e. those associated with construction, delays, contracts and growing pains, are eliminated. Yieldcos typically take advantage of these reduced risks. However, new risks arise, such as those deriving from the older technology and ageing of the plants. In some cases the plants may be underperforming with respect to their initial financial model. In most cases the risks accompanying the asset have not been assessed since the financial close before the plant was constructed or at the start of operation. That means that the risks involved in the operating project are unknown.

Before the transaction can be performed, the risks of the plant should be assessed and the possibilities for resolving underperformance and further optimization should be charted. To accomplish this, an independent third party must perform a Technical Due Diligence and an Asset Optimization Assessment, respectively. Currently such services already exist, but PV plant (portfolio) stakeholders need transparent and uniform methodologies that are accepted industry wide. The Recommended Practice developed by RESALE will bring this benefit.

Benefits over common standards 
Of the topics covered in the RESALE Recommended Practice, some are (partially) handled by a number of existing standards. Relevant examples include ASTM E2848, E927, E1036 and E772, IEEE 1526-2003, IEC61215, IEC61730 and IEC62446. None of these standards address the specific risks involved with PV projects and portfolios being transacted in the secondary market. Moreover, the Recommended Practice has a number of important benefits over these standards, including:

  • one framework standard for transactional issues of solar PV plants,
  • which allows for comparison to other photovoltaic installations, and
  • their performances, also located in different places;
  • allowance for aged, not only newly installed, plants;
  • gaps filled: addition/expansion with newly written guidelines where needed.

Unlike IEC standards (International Electrotechnical Commission) the Recommended Practice is not limited to the safety of electrical components and equipment. It also covers quality, risks and performance of full systems.

For more information about this RESALE joint industry project, the organisation, timeline, cost and budget, please download the brochure below or contact Paul Raats (paul.raats@dnvgl.com / +31 26 356 2482).