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Diligence

How we underwrite a solar project

Sunlight Energy Investments6 min read
How we underwrite a solar project

Every commitment Sunlight Energy Investments makes rests on rigorous solar project underwriting. Before capital is deployed, we stress-test the technical, commercial, and financial assumptions that determine whether a project will perform for 25 years or more—a discipline that protects both investors and developer partners.

Technical diligence

Before capital is committed, we independently review:

  • Resource and yield: irradiance data and production modeling against P50/P90 expectations
  • Design and equipment: module, inverter, and tracker selection and warranties
  • Site conditions: geotechnical, environmental, and constructability factors
  • Interconnection: queue position, studies, and upgrade costs

Interconnection risk is often the largest schedule variable in late-stage development—and we model it conservatively before committing.

Commercial diligence

The revenue side gets equal scrutiny:

  • Offtake: PPA tenor, pricing, and the creditworthiness of the counterparty
  • Permitting: the status and risk of local, state, and federal approvals
  • Contracts: EPC, O&M, lease, and interconnection agreements

We evaluate whether offtake terms meet the bar for a bankable PPA that lenders and tax-equity partners will finance.

Financial diligence

We build a bankable financial model that captures:

  • Capital and operating costs across the asset life
  • The full capital stack: equity, tax equity, and debt
  • Federal credit eligibility—beginning-of-construction documentation and placed-in-service timing under the post-OBBBA phase-out rules
  • Sensitivity and scenario analysis on the key value drivers

Discipline over volume

Not every project clears our bar, and that is the point. Disciplined underwriting protects our investors and our developer partners alike. We would rather pass on a marginal project than compromise on diligence.

Working with Sunlight

Our in-house diligence capabilities let us move decisively while maintaining institutional rigor. Developers seeking a decisive, experienced equity partner can explore our developer program or reach our team to start a conversation.

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