Case

All-round Project Optimization of Solar Project

Momentum took over the administration in 2020 and found that the company’s profitability was low and future returns could be improved.
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Solar-optimization
What is it?
A 5 MW PV project with tight finances due to inappropriate agreements on operation and financing
What did we do?
As soon as we took over the project administration, we carried out a thorough analysis of the structure, the agreements, the production, etc., and we then initiated optimization measures.
What was the outcome?
A significantly improved economy in the project that makes it likely that the owners will get a return on their investment, rather than a loss.

Momentum helps solar project with all-round optimization

There are many ways to optimize a solar or wind turbine project, and it is not always about the asset itself and the production. As always, when we take over a new project, we carry out a thorough analysis of the project which results in suggestions for optimizations and savings for the owners.

In this case, revenue had to be improved, operating costs reviewed, and financial costs reduced.

In parallel, and in close consultation with the project company’s board, Momentum has worked with all 3 aspects, and the first solved issue was a local O&M contract with a long binding, which was nevertheless renegotiated with a new agreement and an annual saving of approx. 15%.

On the revenue side, new agreements on electricity sales were entered into via a shorter PPA (Power Purchase Agreement) and a new partner, which resulted in a sales price increase on the variable part of a small 40%, and a hedging of the price for a shorter number of years.

As the biggest hurdle, the company also had a very unfavorable second mortgage loan, which could potentially mean that the owners would lose money on their investment. After a long process of searching for possible solutions, negotiating with the lender, budget simulations, tax aspects and clarifying the legal position, the loan has been repaid. The owners ultimately chose to pay in the funds themselves as this was the best and cheapest solution.

It is estimated that the company saves a larger 7-digit amount in DKK in interest due to the restructuring. The owners are also very happy with the result:

"You (Momentum) have been outstanding, and we can be happy that we now have an administrator team that creates value for the investors"

says the chairman of the company, who for legal reasons wishes to remain anonymous.”

If your project also needs an all-round check of the project and its structure, please contact us for a non-binding dialogue.