Investor due diligence on renewable assets: what gets checked

Before an investor acquires a renewable energy asset, or a lender finances one, they carry out due diligence — a structured review of everything that could affect the asset's value and risk. For sellers and developers, understanding what gets checked helps prepare. For investors, it's a reminder of where problems typically hide.

The main areas

1. Land

• Title to all land used — plant, roads, substation, lines
• Lease terms, duration, renewal and transfer clauses
• Registration and stamp duty compliance
• Rights of way along routes
• Disputes, encroachments and litigation
• Restoration obligations

Land findings are common, especially on assets built quickly or on many small parcels. See tracing a chain of title and key lease clauses.

2. Permits and approvals

• All required approvals obtained
• Conditions met and documented
• Renewals current
• Any violations or notices

See renewable project approvals overview.

3. Grid and connectivity

• Connectivity and connection agreements
• Evacuation line ownership and land rights
• Curtailment history
• Metering arrangements

See grid connectivity basics.

4. Offtake

• PPA terms — tariff, term, volumes, termination
• Offtaker creditworthiness and payment history
• Receivables and delays
• Change in law and regulatory exposure

See what is a PPA.

5. Technical

• Design and construction quality
• Equipment condition and warranties
• Energy yield assessment — for operating assets, adjusted using actual data
• Degradation. See module degradation and warranties.
• Remaining useful life

6. Operations

• Generation, availability and PR history. See solar performance ratio and availability.
• O&M contract terms and provider performance. See structuring O&M contracts.
• Fault history and major repairs
• Spares and inventory
• Safety record

7. Contracts

• EPC contract — warranties, defect liability, outstanding claims
• O&M, insurance, security and other contracts
• Change-of-control provisions — some contracts need consent for a sale

8. Financial and tax

• Financial statements and models
• Debt terms and covenants
• Tax position and any exposures

9. Insurance

• Coverage, limits and claims history

10. Environmental and social

• Compliance with conditions
• Community relations and grievances
• Land restoration obligations

Development-stage assets

For assets not yet built, diligence focuses on:

• Land secured or securable
• Grid connectivity status and milestones
• Permits status
• Offtake status
• Resource data quality
• Development budget and schedule

See from sourcing to close.

Operating assets

For operating assets, actual data is the best evidence:

• At least one, ideally several, years of generation data
• Comparison with original energy estimates
• Availability and fault patterns
• Curtailment history
• Receivables history

An asset performing below its original estimate may still be a good investment at the right price — but the gap must be understood.

Common findings

The data room

A well-organised data room speeds diligence and signals good management:

• Organised by area
• Complete and current documents
• Index with descriptions
• Q&A log

See project documentation file.

For sellers: preparing for diligence

1. Run your own internal review first
2. Fix what can be fixed — land registrations, permit renewals
3. Organise the data room
4. Prepare explanations for known issues
5. Be transparent — surprises later reduce trust and value

Site visits

Documents tell only part of the story. A site visit shows the physical condition of the plant — drainage, vegetation, module damage, corrosion, security, housekeeping — and gives a feel for how well it is run. Talking to the O&M team, and where appropriate to landowners and neighbours, often reveals issues that never appear in reports. Investors should visit every asset of significance before committing.

Prioritising findings

Not every finding matters equally. A useful approach is to classify each one as a deal issue (which must be resolved before signing or reflected in price), a completion condition (to be fixed before the transaction completes), or a post-completion action (to be managed after acquisition). This keeps negotiation focused on what really affects value and risk.

Common mistakes

• Treating land as a formality
• Relying on original energy estimates instead of operating data
• Missing change-of-control requirements
• Incomplete data rooms causing delays
• Hiding known issues

After the transaction

Due diligence findings don't disappear at signing. Many are dealt with through conditions to be met before completion, specific indemnities, price adjustments or post-completion actions. The new owner should turn the findings list into an action plan — land registrations to complete, permits to renew, warranty claims to pursue — with owners and deadlines, so that issues identified in diligence are actually closed rather than inherited quietly.

How we help

Through project advisory and land documentation and due diligence, we support investors and sellers with land and documentation reviews, data room preparation and resolution of findings. Legal, technical and financial opinions come from qualified advisers.