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Independent Engineering Reports

What is an Independent Engineering Report?

The Independent Engineer provides the critical technical expertise necessary ensure the successful completion and goal realization of large renewable energy projects. Below are some frequently asked questions regarding what Independent Engineers do, what an IE report is, and who relies upon them.
 

What is an Independent Engineer?

An Independent Engineer is a term used for the 3rd party representative of an owner or Lender/financier. An Independent Engineer offers their clients a non-biased assessment on the technical, contractual, and financial aspects of large capital renewable energy projects.
 

What is an Independent Engineer Report?

An Independent Engineer Report (IE Report) is intended to provide the client with a review of the proposed solar project’s contractual documents and an evaluation of the technical design to verify compliance and ability to meet contractual obligations. Essentially, it is a due diligence report to help the project financiers identify and mitigate the possible risks in the proposed renewable energy project.

The scope of the analysis includes the following:

Executive Summary

  • Project description
  • Partner’s conclusions

Technical and Engineering Documentation Review:

  • Review of 3rd party technical reports
  • Engineering review of electrical, structural, civil, and interconnection designs
  • Evaluation of equipment providers and purchase orders for the solar modules, inverters, mounting system, and transformer

Energy Production Review

  • Solar resource review
  • kWh energy production review
  • Simulation of performance estimates and modeling to be compared with those provided

Contracts Review

  • Power Purchase Agreement (PPA)
  • Engineering Procurement & Construction Agreement (EPC)
  • Operations and Maintenance Agreement (O&M)
  • Interconnection review including net metering / remote net metering (if applicable)
  • Site lease or access agreement
  • Rebates and incentives (if applicable)
  • Review of financial model and technical assumptions

Site Suitability and Hazards Review

  • Site suitability evaluation (access, topography, near & far shading)
  • Governmental regulations including code compliance, zoning approvals, and building permits
  • Review of roof (if applicable) including age of roofing membrane, warranty and structural load bearing capacity
  • Review of seismic and wind, flood plain, geotech, ALTA survey, ESA reports, etc. (if necessary)
     

When would an IE Report be requested?

An IE Report is usually requested upon due diligence for an M&A Transaction, Construction Loan, Commissioning, a Long-Term Loan or Refinancing. The reports differ in the components based on timing and client requirements.
 

What do you mean 'report components'?

A typical IE report is often a combination of both due diligence and construction risk management services and can vary based on the needs of the client. For example, an IE Report prior to a Construction Loan can include not only the IE Due Diligence Review discussed above, but may also include:

  • A Document and Cost Review in order to conduct a budget review and construction schedule analysis
  • A Contractor Evaluation to assess the qualifications and capabilities of the General Contractor to complete the project
  • A Financial Analysis, where an independent financial model is created to verify the projects inputs and results.

In addition, services can be arranged to be performed post close of the Construction Loan such as Construction Progress Monitoring, Funds Control with option of Disbursement, as well as a variety of Commissioning services (ex: IE Witness Tests; Punch List; Placed in Service Certification; and Mechanical, Substantial, and/or Final Completion Certifications).

For an IE report requested prior to closing on a Long-Term Loan, the IE due diligence review can be combined with a Site Inspection (and Photo Log), performed in order to confirm the equipment and operational parameters documented are what was used on site. In addition, the site inspector will verify testing was done correctly with the appropriate equipment.
 

Who orders IE Reports?

IE reports are issue to banks, developers, Independent Power Producer’s (IPP’s) and other Owners, and tax equity providers. In addition, IE Reports are often a requirement under government backed financing and incentive programs.