Step 12 – Applications

Scoping opinion

The grid connection module provides guidance on obtaining a grid connection.

A particular issue for remote, large, ground mounted solar PV arrays is the potential distance of the installation from a point of connection. This is because the very nature of an open site that makes it ideal for a large solar PV array is unlikely to be attractive for other development requiring electricity supply. While distribution network wires passing close to the site is potentially an advantage, ‘tapping in’ to this network may require significant investment in suitable transformers. The ideal connection is where this kind equipment already exists, into a point of termination or into an existing point of off-take/demand. As a result, long cable runs may be required and these may have to be underground, which can be expensive.

Other issues are around the intermittency of solar PV generation and the potential this has to create instability in the network. Again, while this problem can be solved, this is at the expense of more costly control gear relative to base load generation technologies.

Planning application

If the proposed solar PV installation is not a permitted development, then planning permission must be sought. Your earlier investigations should have determined whether permission is required for the size of array proposed and the site you have selected.

As finance is unlikely to be secured until all planning consents and grid connection agreements are in place it is important that the planning application is made no later than at this point in the process. Further information on submitting a planning application is available in the planning module.

Step 13 – Procurement

At this point, the process of finalising suppliers of equipment and services will need to be completed. Again, note that if your solar PV project is 50 kW or less, then to be eligible under the FIT scheme your installation must be commissioned by a MCS-certified installer using a MCS-certified product, or be certified under an equivalent scheme. It is good practice to seek competitive tenders and the process of seeking competitive tenders from suppliers should now be completed and a supplier selected. Factors to consider in your tender brief and in your assessment of responses include not just the capital cost of the panels alone, also but the relative cost of fixings, inverter replacement, alternative securing mechanisms, warranty and projected operating performance and annual maintenance costs.

Some suppliers may also undertake installation as part of the panel price. To identify the financial value of this work, quotations from alternative suppliers of these services should be sought. However, it must be recognised that not using the supplier to install the panels may impact on technology warranties.

The timing, process and completion of the procurement process will be dictated by the route to capital drawdown which in turn is linked to the means by which the project will be funded.

More guidance on procurement issues is provided in the procurement module.

Step 14 – Financial close

Using the detailed financial appraisal previously completed with the CARES Project Finance Model, or another finance model, which has been verified by an accountant, it should be possible to secure finance through your chosen route.

Your finance providers will complete a full due diligence of the project, which includes a detailed analysis of potential project performance, all associated costs, warranties and liabilities. If you have completed your CARES Investment Ready Tool you will have collated a large proportion of the information required by the lender and identified any gaps in the information that the lender may require. The lender may also require a significant financial floating bond be set up to pay the banks costs irrespective of the result, positive or otherwise of the due diligence process.

Financial close is the point at which all contracts are signed and funds are transferred between your lender and all your suppliers. Prior to this point your suppliers are likely to have requested deposits for all materials and services. At financial close the balance of payment is made.

This can be a busy period, so it is important to ensure that the relevant people with delegated responsibility are available to sign off any legal agreements.

Break point 3 – Did the project reach financial close?

If you have reached financial close you can move ahead to construct the PV system. If not, the steps 11 to 13 need to be repeated until this is achieved and the capital needed to construct the project is made available.