
Early Stages and Financial Risk
The solar industry relies on investment to produce projects, and although the industry is booming, investment is not always guaranteed. Many companies face a variety of risks in the early stage of a project including financial risk, political or regulatory risk or simply weather-related volume risk. The beginning of a project is always a little nerve-wracking but a company that does their homework already has an advantage. Talk to your investors and ensure that you have a viable project plan combined with a project manager that can deliver on time. Ensure you have worked out permits and regulations and always leave room for weather changes (it always rains on the worst possible day, take it from experience); and of course smart and detail oriented project planning is a must. Without it, the project might completely fall apart in the early stages of its life.
Scaling and Diversification
We have seen it time and again, a smaller company can identify a risk to a project, but can’t mitigate it due to a lack of manpower or expertise. No matter the size of a project, the ability to scale will allow you to bring in experts and people to help mitigate and transfer risks that you are able to identify. Utilising different technologies and swappable gear will allow you to not only avoid risks, but also allow you to adapt to the changing environment.
Insurance is Vital
In a recent European Union survey, 60% of respondents utilized a type of insurance policy to mitigate the risk of a renewable energy project, and that number is expected grow as the solar industry continues to expand. Insurance has proven to be an effective transfer method for a number of high cost risks, including, but not limited to financial risk, weather-related risk and regulatory risks. Insurance within the industry is still steep, but for those who are taking on significant risk for a larger project, insurance is worth its weight in gold.