5 Steps to Check the Price and Disaster Risks of a Solar Power Plant

Table of Contents

• The price of a solar power plant varies significantly with disaster risk

• Step 1: Confirm the site and disaster risk assumptions

• Step 2: Verify drainage, terrain, and sediment/landslide risks on-site

• Step 3: Check for equipment damage from wind, fallen trees, and flying debris

• Step 4: Confirm disaster recoverability and the risk of suspension of electricity sales

• Step 5: Verify insurance, repair history, and management structure

• Approach for reflecting disaster risk in price decisions

• Summary: Confirm disaster risks based on on-site evidence and reflect them in the price

The price of solar power plants varies greatly with disaster risk

When considering the purchase or acquisition of a solar power plant, many professionals often focus on price, installed capacity, power sale terms, generation performance, and the remaining term. These are the basic criteria for purchase decisions, but for solar power plants that operate outdoors for long periods, disaster risk can also have a major impact on price. In locations prone to heavy rain, typhoons, strong winds, landslides, flooding, snow accumulation, fallen trees, or lightning strikes, there is a risk of power outages, equipment damage, repair costs, delayed recovery, and revisions to insurance terms.

For a practitioner searching for "solar power plant price", what's important is not just whether the quoted price is low or high. It is to check to what extent disaster risk has been factored into that price. Even a plant that appears inexpensive may entail significant post-purchase burdens if conditions such as poor drainage, slope instability, proximity to forests with a risk of falling trees, access roads that would be difficult to use in a disaster, or an unknown history of past damage are present.

Conversely, even power plants that appear expensive can be easier to consider as long-term prospects if they have a well-designed drainage plan, stable terrain, well-managed surrounding trees, easy site access during disasters, and organized records of past repairs and insurance coverage. Low disaster risk, or the ability to understand and manage risks, is an important factor that supports a power plant’s value.

When assessing the price of a solar power plant, you must consider not only its generation performance under normal conditions but also what kinds of damage could occur in abnormal situations and how quickly recovery can be achieved if damage occurs. Even if generation performance is stable, conditions such as drainage channels overflowing during heavy rain, surrounding trees falling in strong winds, or inability to access the site during snowfall will affect future revenue and management burden.

Confirming disaster risk cannot be done with desk-based materials alone. After reviewing hazard information, past damage records, inspection reports, repair histories, and insurance coverage, you need to actually inspect the site's terrain, water flow, slopes, drainage channels, trees, fences, access routes, and equipment layout. This article outlines five steps for practitioners to verify the price and disaster risk of solar power plants.

Step 1: Confirm assumptions about the site and disaster risks

The first step is to clarify the plant location and the assumptions about disaster risks. Solar power plants are outdoor installations, and the risks they face vary greatly depending on where they are installed. Coastal areas, mountainous areas, locations near rivers or waterways, sloped terrain, reclaimed or developed land, valley terrain, snow-prone regions, and open land exposed to strong winds all present different disaster risks that should be checked.

When evaluating a site, first check the surrounding topography. Determine whether the power plant is situated lower than the surrounding area, on higher ground or on a slope, whether there are woodlands or cut slopes behind it, and whether there are rivers or waterways nearby. If the terrain tends to collect runoff from the surroundings, be alert to flooding and poor drainage. If it is close to forests or slopes, assess the risks of sediment inflow, fallen trees, leaf litter, and slope failure.

Next, review past disaster and repair histories. Check whether mud or debris flowed in after heavy rains, whether fences or mounting racks were damaged by strong winds, or whether snowfall caused power generation stoppages or equipment deformation. Past damage itself is not necessarily an immediate problem. What matters is whether the cause was identified and whether measures to prevent recurrence were implemented after restoration.

Be cautious if disaster risks are not sufficiently explained in the project documentation. For lower-priced power plants, concerns about the site may be reflected in the price. Examples include difficulty accessing the site during disasters; the need for drainage channel maintenance; ongoing upkeep of surrounding trees; and the necessity of confirming insurance terms. These factors affect the plant’s profitability and management costs.

Also, site risk cannot be judged by power generation records alone. Even if generation is stable under normal conditions, there is a possibility of severe damage from heavy rain or strong winds that occur once every few years. Before purchasing, it is important to separately check the power output under normal conditions and the vulnerability during disasters. Rather than assuming that good generation records mean it is safe or that a low price means it is a bargain, confirm whether the land can be operated over the long term.

If you can clarify the assumptions about the site's location and disaster risks, it becomes clear what to inspect during subsequent on-site checks. By deciding in advance whether to focus mainly on drainage, slopes, the risk of fallen trees, or access routes, you can increase the accuracy of the site survey.

Step 2: Inspect drainage, topography, and sediment risks on site

Next to check are drainage, topography, and sediment risk. One of the most common disaster risks for solar power plants is problems related to water flow. If you buy without confirming where water will flow in and out during heavy rain, issues such as scouring around foundations, ground weakening, impacts on cables and electrical equipment, deterioration of maintenance paths, and sediment accumulation can become problems later.

During drainage inspections, we check the location and slope of drainage channels, their tendency to clog, the accumulation of sediment and fallen leaves, and the inflow of rainwater from surrounding areas. Because problems are often hard to see in dry weather, we look for traces of water flow, places where sediment has collected, areas where vegetation is excessively overgrown, spots prone to becoming muddy, and signs of repairs to the drainage channels. Such traces can indicate locations where water has accumulated in the past.

Topography is also important. On sloping ground or reclaimed/developed land, water and sediment can flow in from above. If there is a risk of sediment flowing out to the lower side of the power plant, you must also consider impacts on neighboring properties, roads, and waterways. Where there are slopes, check for cracks, collapse, erosion, springs or seepage, and disturbed vegetation. At power plants with unstable slopes, the burden of post-disaster recovery and additional construction work can be significant.

Drainage and sediment issues may not immediately show up in power generation output. Even if current generation performance is good, a plant that requires clearing drainage channels and removing sediment after every heavy rainfall will face increased operation and maintenance costs. If scour around foundations progresses, it can affect the stability of mounting structures and panels. If water tends to collect around cables and connection equipment, it can also impact safety and increase the risk of shutdown.

In lower-priced listings, the low price may reflect risks related to drainage and topography. In higher-priced listings, well-managed drainage, stable slopes and access/maintenance roads, and easier recovery after disasters may be included as part of the value. Before purchasing, it is important to check drainage and topography not merely as land conditions but as factors that affect future repair costs and the risk of operational downtime.

During on-site inspections, we record drainage channels, slopes, low-lying areas where water is likely to collect, sediment accumulation sites, areas around foundations, and areas around electrical equipment. If, together with photographs, you can organize what kinds of water risks exist at which locations along with location information, it becomes easier to use for internal briefings and repair planning.

Step 3: Check for equipment damage caused by wind, fallen trees, and airborne debris

When assessing disaster risks at solar power plants, equipment damage caused by wind, fallen trees, and flying debris is also important. In locations prone to strong winds or near forests, solar panels, mounting structures, fences, cables, power conversion equipment, and monitoring devices can be damaged. To determine whether the price is appropriate, it is necessary to check the extent to which wind damage and tree-fall risks are present at the site.

First, what you should check is the condition of the surrounding trees. If there are tall trees near the power plant, there is a risk that branches will break in strong winds, trees will fall, fallen leaves will accumulate in drainage channels, and they will cast shadows in winter or in the mornings and evenings. Even if they do not appear to be a problem now, trees grow. For used solar power plants, surrounding trees may be larger than they were at the start of operations, so it is necessary to consider future shading and the risk of fallen trees.

Next, check the condition of the mounting racks and fastenings. During strong winds, the panels and racking are subjected to significant loads. If there are loose fastenings, corrosion of the racking, scour around the foundations, or distortion of the panel frames, the risk of damage during strong winds increases. Even if power generation performance is stable, plants with structural concerns should be assessed cautiously.

The condition of fences and gates is also important. If a fence is warped, posts are corroded, a gate operates poorly, or vegetation is entangled around the fence, damage is more likely to spread during strong winds or when trees fall. Fence damage also affects safety management. Because it can lead to intrusion by animals or third parties, surrounding equipment other than the power generation facilities should also be checked.

We also assess the risk of flying debris. If there are material storage yards, undeveloped vacant lots, buildings, or temporary structures nearby, objects may be blown in during strong winds. We check whether there are items around the power plant that could easily become airborne and whether there have been past incidents of panel or fence damage. If wind damage or flying debris damage is recorded in inspection reports or repair histories, we verify what countermeasures were implemented afterward.

In lower-priced power plants, risks from wind damage and falling trees may not be adequately addressed. Conversely, even higher-priced plants can be reassuring for long-term operation if surrounding trees are managed, mounting structures and fences are sound, and past damage records are clear. When checking disaster risks, it is important to consider not only the power generation equipment itself but also the surrounding environment and structural elements as a whole.

Step 4: Confirm recoverability in disasters and the risk of suspension of electricity sales

To reflect disaster risk in pricing decisions, you need to assess not only the likelihood of damage but also how quickly operations can be restored after damage. In solar power plants, if some equipment is damaged by a disaster, a suspension of power generation may occur. If recovery takes time, it will affect power sales revenue. Therefore, recoverability is an important factor in determining whether a price is appropriate.

The first thing to check is whether you can reach the site during a disaster. If access routes are narrow, unpaved and become muddy in wet weather, prone to being blocked by fallen trees or landslides, have unclear right-of-way, or lack space for vehicles to turn around, recovery work may be delayed. Being able to inspect the site under normal conditions is different from being able to bring work vehicles and repair equipment in after a disaster.

Next, check the work access routes to the equipment. Check whether you can safely approach power conversion equipment, junction boxes, cable routes, monitoring devices, drainage channels, and damaged sections of the fence. Conditions such as narrow spacing between panel rows, maintenance walkways that are prone to flooding, overgrown vegetation, or steep slopes make post-disaster inspection and restoration difficult. At plants that are hard to restore, even minor damage can lead to prolonged downtime.

We also review the history of past disaster responses. If there has been damage in the past from heavy rain, strong winds, snowfall, fallen trees, lightning strikes, or the like, we look at how long it took from the occurrence of the damage to on-site inspection, how long recovery took, and whether the same risks remain. If the recovery history is clear, it becomes easier to develop future response plans. If the records are vague, there will be uncertainty in responding to a recurrence.

The risk of suspension of electricity sales is also important. Disasters can not only damage panels and power conversion equipment, but communication failures, faults in connection equipment, safety checks due to poor drainage, and closures of access roads can delay the resumption of power generation. When considering annual revenue and loan repayments, how to estimate the downtime after a disaster is an important factor in decision-making.

In low-priced projects, poor recoverability can sometimes be overlooked. For example, even if a power plant has a good generation track record, if it is difficult to access the site during a disaster, the burden when damage occurs will be greater. In higher-priced projects, good road access, well-organized maintenance access routes, and ease of inspection during disasters can represent part of the value. By checking recoverability, you can judge the meaning of the price more realistically.

Step 5: Check insurance, repair history, and management system

Finally, you should check insurance, repair history, and the management arrangements. Disaster risks cannot be reduced to zero. Therefore, it is important to confirm which risks are covered by insurance, which are controlled through routine management, and what kind of arrangements are in place to restore operations after a disaster. When assessing the price of a solar power plant, you need to consider not only the on-site risks but also the measures in place to prepare for those risks.

For insurance, confirm the scope and coverage. Clarify exactly what is covered—solar panels, power conversion equipment, cables, mounting structures, fences, monitoring devices, drainage facilities, etc. Verify that the coverage addresses local risks such as equipment damage from natural disasters, fire, lightning strikes, fallen trees, flying debris, and suspension of power sales. The mere fact of having insurance is not sufficient; you also need to check deductible conditions and risks excluded from coverage.

Repair history is also important. If there has been damage from past disasters, confirm which equipment was affected, how it was repaired, and what measures were taken to prevent recurrence. Simply stating "repaired" is insufficient. It is important to identify the cause and verify that the same risk no longer exists. If poor drainage was the cause, check whether drainage improvements have been completed; if wind damage was the cause, check whether the fastenings and the surrounding environment have been reviewed.

Under the management structure, the flow of inspections and emergency responses before and after a disaster is confirmed. It clarifies who monitors power generation, who receives notifications when anomalies occur, and who conducts on-site inspections. At remote power plants, on-site inspections after a disaster may take time. If coordination with the management company or workers is weak, discovery of damage and recovery may be delayed.

Also check the quality of the inspection reports. Verify whether post-disaster inspection records, photographs, identified issues, and improvement histories are recorded with concrete detail. If the locations in photos are unclear, the identified issues are vague, or there is no improvement history, they become weak as a basis for risk management. For disaster risk to be reflected in pricing decisions, it is important that the records be specific.

Lower-priced deals may have inadequate insurance and management frameworks. Higher-priced deals may include value in the form of organized insurance, repair history, and emergency response arrangements. Disaster risk should be checked not only for the likelihood of occurrence but also for preparedness and response capabilities.

Approach to Incorporating Disaster Risk into Pricing Decisions

After confirming disaster risks, you need to reflect that information in pricing decisions. If poor drainage, slope instability, the risk of falling trees, access roads that are difficult to restore, or inadequate insurance coverage are found on site, do not simply leave them as mere notes; instead, clarify how they will affect power generation, operation and maintenance costs, repair costs, and outage risk.

First, divide disaster risks into those that can be improved and those that are difficult to improve. Cleaning drainage channels, vegetation management, fence repairs, minor slope repairs, and organizing work routes can, depending on the measures taken, be improved. On the other hand, valley topography, heavy sediment inflow, poor road access, the risk of tree fall from neighboring land, and constraints arising from land contracts may not be easily resolved. The weight that should be reflected in the price varies depending on the potential for improvement.

Next, link disaster risks to the financials. If drainage management or vegetation control is required, maintenance costs will increase. If there is a possibility of equipment damage, factor in insurance and repair costs. If recovery will take time, consider the risk of suspended power sales. Connecting on-site risks to the financials makes it easier to explain why a price is low or high.

In internal decision-making, it is important not only to indicate whether disaster risks exist but also to present the verified basis for that conclusion. Clarify which locations have what kinds of risks, how extensive the required responses are, and under what management system they will be addressed after purchase. If the on-site inspection results are specific, they can be used for price negotiations, insurance verification, repair estimates, and management planning.

For low-priced projects, we check whether disaster risk has been adequately factored in. For high-priced projects, we check whether the higher price can be explained by lower disaster risk and better recoverability. The price of a solar power plant should be judged not only on its power output under normal conditions but also on its resilience and recoverability in the event of a disaster.

Summary: Verify disaster risks using on-site evidence and reflect them in prices

To assess the price and disaster risk of a solar power plant, it is important to check five steps: the location and assumptions regarding disaster risk; drainage, topography, and sediment and landslide risks; equipment damage from wind, falling trees, and flying debris; recoverability and the risk of suspension of power sales during disasters; and insurance, repair history, and management structure. Disaster risk is often not apparent from generation performance during normal conditions alone, but it has a major impact on long-term operational stability.

There may be reasons why a low-priced power plant is inexpensive. Poor drainage, slope instability, the risk of fallen trees, poor road access, difficulty of recovery, insufficient insurance coverage, and an unclear history of past disasters may be behind it. There are also reasons why a high-priced power plant is more expensive. If drainage is in order, the terrain is stable, surrounding trees are managed, the site is easy to access during disasters, and repair history and insurance details are organized, it can be considered an easier project to evaluate over the long term.

What matters for operational staff is organizing disaster risks based on on-site evidence rather than intuition. They need to check on site the flow of water, sediment accumulation, slopes, risk of fallen trees, fence damage, access roads, areas around electrical equipment, and drainage channels, and be able to explain how these affect power generation, operation and maintenance costs, repair costs, and insurance reviews.

During on-site surveys, it is useful to record inspection points related to disaster risk together with accurate location information. If drainage channels, slopes, sediment accumulation areas, trees at risk of falling, damaged fences, access routes, power conversion equipment, cable routes, and candidate repair locations can be recorded with location information, they become easier to use for internal briefings, instructions to property management companies, insurance verification, and repair cost estimates.

If you want to organize the disaster risks of a solar power plant together with on-site evidence, using LRTK (an iPhone-mounted GNSS high-precision positioning device) is also effective. If drainage channels, slopes, fallen-tree risks, equipment locations, areas near boundaries, management access routes, and candidate repair sites within the plant can be recorded along with high-precision location information, you can reconcile discrepancies between drawings and the field and make it easier for stakeholders to share the factors that affect disaster risk. When determining the price of a solar power plant, it is important to assess disaster risk not only from desk-based documents but by building up evidence that can be confirmed on site.