{"id":19702,"date":"2012-06-19T16:48:39","date_gmt":"2012-06-19T13:48:39","guid":{"rendered":"http:\/\/www.iliaspapageorgiadis.ro\/en\/?p=19702"},"modified":"2014-03-12T16:38:34","modified_gmt":"2014-03-12T14:38:34","slug":"romanian-renewable-energy-market-2012-5-investment-traps-in-the-romanian-photovoltaic-sector","status":"publish","type":"post","link":"http:\/\/www.iliaspapageorgiadis.ro\/english\/2012\/06\/19\/romanian-renewable-energy-market-2012-5-investment-traps-in-the-romanian-photovoltaic-sector\/","title":{"rendered":"Romanian Renewable Energy market 2012. 5 investment \u201ctraps\u201d in the Romanian photovoltaic sector"},"content":{"rendered":"

* Starting from tomorrow, my company MORE GREEN ENERGY will be present at RoEnergy, the exhibition held in Bucharest from the 20th to the 22nd of June. In preparation for this important event, I have prepared an analysis of the Photovoltaic segment and the major pitfalls investors face in this area where the interest and potential has been steadily increasing: <\/em><\/p>\n

As we are entering the summer, it is more than clear that the interest in the Romanian Renewable Energy sector is growing. One by one, the largest European markets become oversaturated and investors are searching for new opportunities. Romania is on the top of their list.<\/p>\n

Wind energy is currently the leader of the Romanian Renewable Energy market, however Photovoltaic (PV) energy is expected to “rebound” this year. Although there are just a few PV projects installed thus far, it is estimated that in the following 18 months, 200 – 300 MW will be added in the installed capacity.<\/p>\n

The growth potential for the PV segment is strong, however there are 5 “traps” that investors should be aware of before investing in their project:<\/p>\n

1. “Calculating the expected income using the maximum prices”<\/strong><\/p>\n

Many “consultants” insist that the prices of green certificates will remain at the maximum level for most years of the investment, even for the entire 15-year period. To avoid this trap, serious investors use an “average price” to calculate the expected income and search for the right PPA agreements.<\/p>\n

2. “A new PV project may be delivered in 3 months’ time”<\/strong><\/p>\n

This is an absolute lie. Those consultants claim this in order to receive the advance payment from the investor and then either disappear or search for never ending excuses. If one goes through all the legal processes, it is almost impossible to buy a land today and obtain all required permits for a PV project in less than 6 months or to be more accurate, 9 – 12 months.<\/p>\n

3. “You can still buy a land and develop your own project”<\/strong><\/p>\n

The trap suggesting that it’s a very simple process to transform plain agricultural lands into “potential PV projects” continues to attract investors. It appears that the vast majority of investors believe that a project can be easily developed, by simply buying a cheap piece of land in any location. Serious consultants will inform you that the vast majority of transformers with available capacity are already reserved.<\/p>\n

(Exception: Owning properties with easy connection to the grid or transformer, lands or buildings)<\/p>\n

4. “Checking a PV project is simple”<\/strong><\/p>\n

Doing the due diligence is extremely important. A very large number of projects at the contact stage have not and will not be finally sold, due to issues such as: a) having the wrong technical study, and b) having an unclear connection contract. Other projects have been developed with the sole purpose to be sold, rather than being actually constructed. Some projects face serious problems with their documentation (e.g. I have found a “7 MW project which can supply  just 5,6 MW to the grid”). The fact is that a large number of due diligences have been concluded without success. Investors should never underestimate this parameter, no matter how much the other party is pressuring them to buy quickly.<\/p>\n

5. “You can construct at a very low cost”<\/strong><\/p>\n

This is correct under the conditions that the panels bought are “weird, no-name” ones, the inverters “speak a language you don’t understand”, the structures are considered a “bargain” and the EPC is “a good guy who gives me the real prices”. Under such terms, it would not be a surprise that an investor will pay only 1.000.000 Euro \/ MW or even less. However, remember that there are court files for companies that delivered “painted panels” in Spain (producing nothing), while in Greece there are companies currently in the courts for having installed 20 – 30% less capacity than what they actually signed a contract for. To avoid this trap (especially for long-term investments of e.g. 15 years), investors should carefully select the right materials and experts in EPC and ensure that every step of the investment is under control. Importantly, emphasis should be given on acquiring the official verification and related insurance.<\/p>\n

Overall, the Romanian Photovoltaic segment is expected to boom over the following months. The winners of this investment era will be recognized for their careful plans and strategic steps, the correct structure of their deals, selection of appropriate partners, choice of quality materials, know-how, patience and perseverance. Only the “hard way” will secure your success in the Romanian Green Energy segment. The experience from the boom era in Real Estate shows us what happened to the ones who chose the “easy way”… <\/p>\n

What is your opinion?<\/p>\n","protected":false},"excerpt":{"rendered":"

* Starting from tomorrow, my company MORE GREEN ENERGY will be present at RoEnergy, the exhibition held in Bucharest from the 20th to the 22nd of June. In preparation for this important event, I have prepared an analysis of the Photovoltaic segment and the major pitfalls investors face in this area where the interest and […]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[235],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/19702"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=19702"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/19702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=19702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=19702"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=19702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}