What Documentation Is Required to Get Financing for Your Solar Facility?

Debt financing is usually the last thing developers think about, but you need to be prepared. That preparation should be in the form of well-organized, complete documentation. 

Here is a list of documents you should have handy to make this process as easy as possible. The example below is based on either a ground mount or rooftop solar facility that is not constructed. However, this process can be used for constructed projects or wind power, waterpower, renewable natural gas or energy storage projects with some modifications.

Also note, there will be regional requirements that are not listed in this guide, so check with your debt provider for any additional material that is required.

What Documentation Do You Need to Prepare?

Essential documentation that will be reviewed for accuracy, completeness and technical suitability as applicable and available before the site visit, may include the following:

Previous due diligence report, if applicable: This can save time and provide the debt provider with a sense of comfort if another independent engineer (IE) previously reviewed the facility. If you have a previous report available, provide it.

Power purchase agreement / feed-in tariff documentation: Includes: contract, contract assignment and term buyback documentation, if applicable. This provides important confirmation that the facility is “real” and viable.

Key project design documentation: Includes: as-built, signed/stamped electrical single line diagrams, main equipment specifications (panels, inverters, racking), including capacity, efficiency, warranty, the status of warranty assignment (if applicable) and facility layout drawings. The design documentation is important and should meet industry standards. This documentation will be compared with observations made during the site visit, if there are differences, explanations will be required and documented.

EPC warranty and commissioning report: Includes: Warranty contracts and reports from the EPC signing off of the project, including performance testing reports. Understanding warranty is important from a debt provider hold back point of view, and the commissioning report will provide valuable information to the IE as to the ability of the facility to perform over time.

Grid connection documentation: Includes: A metering plan (if applicable), LDC connection cost agreement and status of assignment, if applicable. Jurisdictions will not allow a facility to connect to the grid without following a process. This documentation will help to mitigate risk in the eyes of the debt provider if the distribution company has signed off on the facility.

Environmental permitting and documentation: Includes: Permitting approval documents from the local government agency. Environmental permitting is important. Facilities cannot begin construction until the required permits or approvals are in place. The debt provider is also interested in the conditions of the permits and whether the ongoing costs to meet these conditions are adequately considered when assessing the ability of the facility to service the debt.

Land status documentation: Includes: confirmation that a lease agreement is in place for suitable duration, building permit or Certificate of Completion. The debt provider wants to understand any risks associated with the lease agreements, like length of term or that zoning will not allow for buildings that can cause shading to be built.

Energy output information: Includes: calculations and/or solar resource assessment. This is very important. If you provide a poor quality resource report that is not consistent with industry standard, the IE will likely raise this as a red-flag and/or may require the analysis be redone, costing additional time and money.

Financial model: Includes: breakdown of main capital cost items (panels, inverters, racking, roof upgrades, other) and operating cost items (O&M contract, monitoring, lease, roof repairs, insurance, administration, other) and debt service calculation, if available. This will be reviewed in depth, so ensure the assumptions and costs can be validated

Constructability assessment documentation: The IE will look for any issues that might cause unusual challenges during the construction of the facility (e.g., geotechnical study).

Notice to proceed related documents: For construction financing, this confirms the facility has been approval to begin construction. This is very important document when shopping for debt financing.

Commercial operation date related documents: This confirms that the project has been signed off. This document can be called a number of things in different markets.

Operation and maintenance documentation: The IE will want to understand the plan, cost and approach. The debt provider will want to see how these costs, including key component replacement, are accounted through the entire lifecycle of the facility.

In summary, spend the time to get your documentation together. Provide the IE with a complete package of documentation and provide access to your facility. You do not want to give the IE or the debt provider a reason to question your facility, if there are issues, work collaboratively with the IE to resolve them.

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With 23 years of experience in sales and marketing, Michael has spent the last five years in the energy industry. Michael has been heading up ORTECH’s business development department for the two years, concentrating on air quality compliance /permitting services for industrial clients and power consulting services for renewable energy clients.

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