Commercial planning and negotiations for the financial model:

-          How to plan the maximum IRR vs minimal risk?

-          How to organise most competitive procurement to meet the financial objective?

-          What items have more pricing flexibility, knowing the latest price benchmarks. how to optimally balance risks vs costs?

-          How to ensure hidden costs or financial risks are not being overlooked, the project is well structured for the exit strategy?

-          What are the financial model sensitivities to various assumptions and factors, how can these be best controlled?

-          Do the inputs of the financial model accurately match the detail of the technical plan?

-          Does the legal documentation fully reflect the risk mitigation for the financial model?


Economic inevitability

The financial model for solar PV will only get better with time.  There are two fundamental reasons for it:

Global ubiquity factor: solar PV systems can be planned anywhere on the planet.  The solar resource is amply  available everywhere on the planet - only a difference of roughly 2x between the sunniest and darkest locations on Earth - unlike the other natural resources needed for large-scale electricity generation.  As a result, the PV supply-chain has unbeatable economies of scale to leverage.  These economies of scale enable the PV industry to persistently drive down costs, as predicted by Swanson’s Law.

Materials availability: there are no foreseeable bottlenecks in materials supplies for PV to achieve the global electricity output we have estimated.  Silicon the dominant semiconductor material used for PV modules is the second most abundant element in the Earth’s crust.  There are several potential substitutes for silicon e.g. a wide variety of thin-film materials.  Silver, the metal used in solar PV modules, is more of a limiting material  than silicon but again there are several possible substitutes for it.  In addition, successive improvements in technology are reducing the amount of materials needed for a PV module to produce electricity. 











Insights         PV Financial Economics  


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