Path-Q Solar
How does a long interconnection wait affect the financial return of a solar project?
Answer
A long wait delays production and bill savings while financing, development, or carrying costs may continue. It reduces the project's value by postponing cash inflows and can also expose the project to changes in equipment, rates, requirements, or incentives.
Key points
- Shift the expected operating date in the financial model rather than assuming savings begin at contract signing.
- Include interest during construction, deposits, development costs, and any delayed revenue or savings.
- Model the risk that the approved design, equipment, export arrangement, or project economics change during the wait.
- Compare the value of waiting with alternatives such as redesign, smaller export, storage, or deferral.
What it depends on
- Expected interconnection timeline and milestones
- Costs incurred before operation
- Financing and payment schedule
- Production, bill savings, export, and project-life assumptions
Risks and trade-offs
- A delay can make a project less attractive even if the final installed price is unchanged.
- Interconnection requirements or export limits may change before approval.
- A rushed alternative may reduce cost or delay but produce less energy or flexibility.
Information you may need
- Written interconnection status and estimated milestones
- Project payment and financing schedule
- Expected operating-date scenarios
- Current equipment, export, and utility requirements
Your next step
What to do next
Re-run the project model with several commissioning dates and verify the current interconnection status and requirements with the relevant utility or authority.
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