Fitch: Promising Early Results Bode Well for Solar Power Projects

NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Encouraging Early Results for Solar Power Projects (Uncertainty Remains for Long-Term Performance)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872412

Annual output for solar power projects has been favorable thus far, though how they will perform over time remains a lingering question mark, according to Fitch Ratings in a new report.

Actual energy production for recently completed monitored photovoltaic (PV) projects is generally equal to or better than the base case forecasts. Projects' energy output exceeded 50% probability of exceedance forecasts (P50) by an average of 9% in their first years of operation. 'Factors driving the better than expected output for solar power projects include better-than-expected solar irradiance and plant availability and higher online capacity than forecasted,' said Senior Director Yvette Dennis.

Initial operating performance for monitored projects has been stable. Annual availability factors for PV projects have been 98.5% to 99.5%, exceeding base case levels and reflecting a very low incidence of downtime. Grid curtailment has been limited, lasting several hours to three days. Additionally, operating expenses for PV projects are generally in line with expectations. Fitch expects stable generation levels for PV power projects due to relatively low output variability compared to wind power projects.

That said, how these solar power projects will perform in the long run remains an uncertainty given a project's 20-25- year debt tenor. 'It will take years of operating performance to assess the accuracy of assumptions for generation output and other long-term financial model variables,' said Dennis.

Completion risk, while low thus far for solar power projects, still exists. 'The good news is that some projects are relying on structural features of their construction contracts to help mitigate completion challenges,' said Dennis. In fact, none of the project ratings in Fitch's portfolio were downgraded due to completion risks based on the strength of their construction contract structures, experienced and reputable contractors, and alternative available suppliers. These fundamental attributes are important whether the PV installation is large, small, ground-mounted and/or rooftop.

'Encouraging Early Results for Solar Power Projects' is available at 'www.fitchratings.com' or by clicking on the above link.

Additional information is available at www.fitchratings.com

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151020006061/en/

Fitch Ratings
Yvette Dennis
Senior Director
+1 212 908-0668
Fitch Ratings, Inc., 33 Whitehall Street, New York, NY, 10004
or
Justin Wu
Associate Director
+1 415 732-5612
or
Gregory Remec
Senior Director
+1 312-606-2339
or
Jelena Babjeva
+44 20 3530 1375
or
Media Relations:
Francoise Alos, +33 1 44 29 91 22
[email protected]
Sandro Scenga, +1-212-908-0278
[email protected]

Source: Fitch Ratings

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