Valuation of a partially constructed Solar PV Module Plant
Valuation of solar PV module manufacturing plant requires more than installed capacity or land value. Investors, lenders, and insolvency professionals rely on structured valuation methods that account for machinery life, output efficiency, demand cycles, and regulatory risk.
Solar PV module plant valuation combines asset-based and income-based methods to determine fair value for investment, financing, insurance, and insolvency purposes. Key factors include machinery age, production capacity, technology risk, demand visibility, and regulatory stability.
We have been assigned to evaluate a Photo voltaic Panel manufacturing plant that was admitted to CIRP under IBC. The plant was under construction when it was admitted into CIRP & construction has been stopped thereafter.
The majority of the plant & machinery were installed when the constriction stopped.
When Is Solar PV Plant Valuation Required?
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Bank financing & project loans
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Private equity or strategic acquisition
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Insurance coverage & claim settlement
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IBC admission, CIRP, or liquidation
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Financial reporting & restructuring
The challenges we faced
- Major pieces of equipment were imported and is first to be set up in India
- Availability of Raw material
- Cheaper Imports
The problem leading to impairment in value
- Any bidder who takes over the company has to deal with expired statutory approvals & terminated contracts
- Deterioration in plant & machinery
- Cost escalation
- Huge CAPEX requirement for completion.
Our approach
A valuation approach was needed to arrive at valuations that could be used to obtain maximum value for the lenders, considering that the plant had been partially constructed and required substantial investment to complete.
The solution we offered
Valuation of these assets under the consideration of growing concerns after completion of balance plant & machinery.
Alternately, the valuation of assets on a piecemeal basis.
Conclusion:
This approach facilitated the lenders to take a decision to dispose of this plant in the best possible manner to recover debts.
Recommended, Valuation of Electronic Trading Company
1. How is a solar PV module plant valued?
Asset-based and DCF methods are used depending on purpose and plant maturity.
2. Is valuation required under IBC for solar assets?
Yes, fair value and liquidation value are mandatory during CIRP.
3. Does machinery technology affect valuation?
Yes. Obsolete technology significantly impacts realizable value.
4. Who can issue a solar plant valuation report?
A registered valuer with plant & machinery specialization.