May 09, 2018

How to Manage an Investor-Ready Solar Portfolio

by Etienne Lecompte

Making your Solar Portfolio Investor Ready

If you want your solar portfolio to really shine come investment time, you need to assume your assets won’t speak for themselves and get proactive.

You’re in an industry defined by the good it does for the world, but that doesn’t mean that every purchase or investment decision is going to be all sunshine and roses. Think SolarCity. Strong brand, seriously unhappy investors.

So how do you run an investor-ready portfolio, and reach the right interested parties?

Be Findable And Transparent

Your average investor doesn’t keep a standing list of every solar project in operation, so if you want to widen your potential investment pool, you’d best be findable online. Assuming the same 5-to-10 investors you’ve had success with in the past will continue to buy in isn’t smart business long-term.

That means you’re going to have to proactively and continually share information on new solar projects in your pipeline:

1. Write about them on your website – your potential pool of investors want to know not just about your portfolio of projects on a macro scale, but on a project-by-project basis as well.

2. For the big ones, use a press release. Did you wake up one morning and realize you’re about to double your total number of projects or megawatts? That’s big news. Get a broader discussion going.

3. Talk numbers, but leave the braggawatts out of the equation. If you play a little fast and loose with production numbers, it’ll undermine you later on in the due diligence process.

4. Don’t go silent between deals. You’re rolling a big rock down a small hill, and you’re going to want some momentum.

Cultivate Good Will

Please, for the sake of your sanity and your bottom line, don’t wait until you’re ready to start seeking investment or selling to think about publicizing your company and your projects. If you work towards strong name recognition from the start, it’ll pay dividends (how punny), later. This means being intentional in your stakeholder communications, building projects with longevity of operations in mind, and showing a history of proactive asset management.

1. Don’t just track stakeholder communications when there’s a problem. Instil in your team the idea that records should be exhaustive. This doesn’t just help mitigate risk to your company and your solar project, it also allows you to pave the way for introspection. Which messages hit home, and which didn’t? You’ll never be able to say for sure if you don’t maintain your records.

2. Choose your projects, parts, and O&M providers wisely. If you’re a solar developer, word gets out if you build sites that break down before they should, and cut corners in development. If you’re an owner or an asset manager, scheduling and proactively tracking your maintenance in detail not only helps insulate your company from risk should something go wrong. It’s proof positive to your potential investors as to the successful operating history of your site, and the skills of your team.

Don’t Wait Until A Deal’s on the Table to Prepare Your Documents and Data for Due Diligence

Your investor won’t be happy to wait while you gather the information they need to make an informed decision, especially since the process doesn’t really change from round to round.

1. Don’t assume you’ll be able to find the information you need as soon as you need it. If you’ve got a sizeable portfolio made up of many small projects (as is often the case with solar energy assets), you probably also have a fair bit of documentation relating to risk, insurance, compliance requirements, leases, power purchase agreements, etc. You should be using tools like PowerHub to keep your documentation in order, and to tie it to the right projects and portfolios.

2. Know your obligations. Track your reporting, your production, your forecasts, revenue, maintenance, and costs. Bonus points if you can do that all in one place, and associate it with either or both the project and portfolio. (Not possible in your own asset management software? We might know a guy…)

Give Your Investors What They Want

The Orange Button is a data taxonomy initiative created to build transparency in what’s being measured, and what’s being talked about when we talk about solar projects, and what’s more, it’s being driven by the banks themselves. Reach out to your monitoring company about ensuring your solar projects are bankable and Orange Button compliant, or better yet, talk to us. We were Orange Button compliant before it was cool.

They want easy access to the information they need to make an informed decision on your business, projects, and portfolio. Using the right data room creates confidence in how you run your business, and your process.

Make the process a pleasant one by centralizing your data and documentation on PowerHub.

Want to learn more?

Our team is always happy to chat.

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