Comprehensive solar project optimization

Momentum took over management in 2020 and found that company profitability was low and future returns could be improved.

Momentum took over management in 2020 and found that the company’s profitability was low and future returns could be improved. There are many ways to optimize a solar or wind project, and it’s not always about the asset and production itself. As always, when we take over a new project, we conduct a thorough analysis of the project, resulting in suggestions for optimizations and savings for the owners.

In this case, revenues needed to be improved, operating costs reviewed and financial costs reduced. In parallel, Momentum has worked on all 3 aspects in consultation and alignment with the project company’s board, and the first knot solved was a local O&M contract with a long commitment, which was nevertheless renegotiated with a new agreement and an annual saving of approx. 15%.

On the revenue side, new power sales agreements were signed via a shorter PPA (power purchase agreement) and a new partner, resulting in a sales price increase on the variable part of just under 40% and securing the price for a shorter number of years.

The company’s biggest hurdle was a very unfavorable 2nd mortgage, which could potentially mean that the owners would lose money on their investment. After a long process of exploring possible solutions, negotiating with the lender, budget simulations, tax aspects and clarifying the legal position, the loan was successfully repaid, as the owners ultimately chose to pay the funds themselves as the best and cheapest solution.