Fitch Updates Rating Criteria for Solar Power Projects

No changes to the ratings of existing transactions are anticipated as a result of the application of the updated rating criteria.

NEW YORK--Fitch Ratings has published an update of its 'Rating Criteria for Solar Power Projects', which describes the analytical framework Fitch applies to evaluate debt issued for a broad range of utility-scale photovoltaic (PV), concentrating PV, and concentrating solar power projects worldwide. The solar projects discussed in the report are financed as stand-alone assets (or portfolios) with no formal guarantee of debt service from the sponsors (nonrecourse).


The updated report replaces the existing criteria (published Feb. 23, 2011) without modifying Fitch's analytical approach. No changes to the ratings of existing transactions are anticipated as a result of the application of the updated rating criteria.

The updated criteria report provides a summary of the broad attributes that support the ratings for solar power projects. The report highlights six key risk factors Fitch evaluates when rating debt issued for solar power projects. The criteria report also identifies typical attributes for the six risk factors, summarized below, which are assessed as strong, midrange, and weak.

--Completion Risk: Reasonableness of plan to achieve commercial operation considering technology risk, contractor qualifications, and construction contract terms including completion guarantees.

--Operation Risk: Stability and adequacy of plant performance supported by a qualified operator, comprehensive maintenance regime, and reliable technology.

--Supply Risk: Measured variability of solar resource; scope, quality, and reliability of a project's energy production forecast.

--Revenue Risk: Strength, duration, and flexibility of the power sales arrangement as well as the stability of the regulatory support framework.

--Debt Structure: Composition of payment terms and strength of covenants to support debt payment, maintain adequate liquidity, and limit leverage.

--Debt Service: Cash flow resiliency to support timely debt payment under base case, stress case, and break-even financial scenarios.

The full report, 'Rating Criteria for Solar Power Projects', is available at www.fitchratings.com.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research: Rating Criteria for Solar Power Projects
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=671120

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Featured Product

Tile Replacement Mount from Quick Mount PV

Tile Replacement Mount from Quick Mount PV

The Tile Replacement Mount provides a fast and easy way to install solar on tile roofs while protecting against water intrusion. Simply remove the tile and replace it with the Tile Replacement Mount. Works with all standard curved and flat tile roofs, and all standard rail-based racking systems. Flashed at both the deck and top levels, the mount is fully engineered to meet code requirements and industry best practices. The Tile Replacement Mount features Quick Mount PV's patented Elevated Water Seal technology for optimal waterproofing. Get a free sample and see for yourself!