Watt’s the Deal with evaluating the financial health of solar developers in 2025?
Solar developers are entering a post-OBBBA world that's making the capital markets take a closer look at their renewable energy partners. Already, we’re seeing liquidity issues causing developers to restructure or show signs that they’re going out of business. Naturally, that’s making investors reevaluate their solar development partners and there is a flight to quality occurring.
So, what are the key hallmarks of a healthy solar developer? Here’s what financial institutions and private equity investors should look for:
Financial Resilience
Solar developers should possess a strong cash position and available liquidity to withstand market lulls--and reasonable SG&A or recurring operating expenses.
The company's debt strategy is either conservative or, if highly leveraged, supported by the scale and stability of its broader operational business. The developer is adept at leveraging new financing models and structures, to diversify its capital sources.
To take Renewable Properties as an example, we have 36 operating projects, totaling 142 MW on our balance sheet, which are delivering millions in annual revenue.
Roughly 50% of our projects are in variable-rate community solar markets and the other 50% have long-term fixed-price utility contracts. We have another 100 MW of more projects starting construction in the next 3 to 6 months that will be delivering additional revenue over the next 20 years.
Over the past 24 months, we’ve even started selling certain portfolios to generate upfront developer fees that improve our liquidity even further, allowing us to grow and continue acquiring projects in high-demand areas with proven community solar constructs or a stable utility offtakers.
Operational Discipline
Investors should look for renewable energy developers that have embraced a flexible, specialized business model, avoiding fixed-cost burdens, such as owning an in-house EPC arm. A renewable energy developer's portfolio should also be geographically and technologically diversified, providing a critical hedge against risks in any single market or sector.
There’s a reason that Renewable Properties is active in 16 states and isn’t just a solar development company. We analyze each market’s needs and carefully select our sites. If policies in one market suddenly change, we have 15 other markets to focus our time and resources.
In terms of technology, we develop small-scale utility and community solar, energy storage, and EV infrastructure. We’ve also recently started developing powered land for edge data centers in key metro locations throughout the U.S. This lean, flexible, diverse business model gives our investors the confidence that we’re able to navigate and weather unforeseen storms better than the rest.
Pipeline Quality, Not Quantity
A financially sound developer's project pipeline needs to be rigorously managed through a process of disciplined attrition. For developers with liquidity risks, we’re starting to see a natural divestiture. Dsevelopers are culling their speculative projects to focus only on the most viable ones.
Looking at a renewable energy developer’s portfolio, its pipeline should have a high percentage of projects that have strong fundamentals, and:
As of today, Renewable Properties has a 1.6 GW pipeline of solar, storage, and EV infrastructure across 225 projects. That’s not the biggest pipeline in solar, but you can be sure that every site has been carefully modeled for risk, technology, tariff exposures, local incentives, and long-term revenue—or we wouldn’t have made that investment.
In short, investors should look for a developer that is financially agile, operationally flexible, have a strong liquidity position, and are strategically focused on developing a high-quality, bankable pipeline. Those are the companies that are built to thrive, not just survive, in the years to come.
And that’s Watt’s the Deal!
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