6 Criteria for Comparing the Prices of Used Solar Power Plants

When comparing prices of solar power plants among used properties, relying only on superficial sale terms can lead to wrong judgments. Even properties that appear to have similar generation capacity, be in similar regions, and have similar remaining feed-in tariff periods can differ greatly in actual value. Because used solar power plants already have an operational track record, there is more information available for assessment than for new projects; however, equipment degradation, management condition, contract terms, land conditions, and future repair risks are all intertwined in complex ways. Therefore, rather than simply calling something "cheap" or "expensive," it is important to break down and compare the factors that make up the price.

This article organizes six criteria that practitioners should use when comparing the prices of used solar power plants. To make them useful for purchase consideration, internal approvals, investment decisions, maintenance handovers, and screening before on-site inspections, it explains the specific perspectives that should be checked.

Table of Contents

• Align price assumptions with electricity sales terms and remaining contract duration

• Check the difference between actual and projected power generation

• Assess equipment aging and replacement risks

• Factor land conditions and management burden into pricing

• Verify uncertainties in contractual relationships and rights

• Visualize on-site conditions through surveying and documentation

• Summary

Align pricing assumptions with electricity sales conditions and remaining term

When comparing used solar power plants, the first criteria you should align are the power purchase terms and the remaining contract period. Because a plant’s price is determined based on the expected future revenue from power sales, the valuation can vary greatly for the same installed capacity depending on how much of the power purchase period remains and under what contractual terms power can be sold.

In materials for used properties, the generation capacity and annual power output are sometimes prominently displayed. However, in practice that alone is insufficient. What matters is under which contractual terms that generation is monetized, and how long those terms will continue. Properties with a long remaining term are easier to project future income for, but they also require planning for equipment repairs and replacements over the long term. For properties with a short remaining term, the period for projected income is limited, so decisions must take into account exit strategies after acquisition and the potential for utilization after the contract ends.

When comparing, always check the date power sales began, the contractual power sales period, the number of years of operation to date, and the remaining period. It is important to confirm not only the "yield" or "expected annual income" shown in the documents, but also how stably the system can generate and sell power over the remaining period. Especially for used properties, the longer the time since operation began, the more likely there is a gap between the original equipment performance and current capability. Even if the power sales terms look favorable, if the generation equipment is not operating adequately, it will not result in the expected returns.

Also, when comparing multiple used properties, it is important to evaluate them from a perspective that aligns their remaining terms. Simply comparing prices can make properties with shorter remaining terms appear cheaper. However, if the remaining income-generating period is short, the potential to recover costs after acquisition is limited. Conversely, a property that appears expensive may actually be reasonable if it has a long remaining term and a stable operating track record.

One thing to be careful about is that even if the power sales conditions are stated in the documents, that does not necessarily mean they are still valid now or can be carried over after the transfer. There are many items that need to be checked after the sale, such as transfer of ownership, contract succession, procedures with the utility company, changes to the business plan, and consistency with certification information. If these issues remain ambiguous and you compare only on price, unexpected procedures or restrictions may arise after purchase.

When comparing the prices of used solar power plants, you should first organize the power purchase conditions and the remaining term as the "foundation of revenue." Based on that, the practical first step is to assess not whether the price is high or low but whether stable operation can be maintained throughout the remaining contract period.

Check the difference between actual and expected power generation

A major characteristic of used properties is that they already have operational records. While newly built solar power plants are evaluated mainly through simulations, with used properties you can verify actual power generation, the amount of electricity sold, downtime history, seasonal variations, and year-to-year trends. These performance data are extremely important when determining the price.

However, when looking at actual power generation, you should not simply consider the annual generation alone. Generation fluctuates due to a variety of factors such as that year’s solar irradiance conditions, temperature, snowfall, shading, equipment outages, output curtailment, maintenance shutdowns, communication failures, and power conditioner malfunctions. If generation is high in a given year, you need to separate whether that is due to equipment performance or simply because the weather was favorable. Conversely, if a year’s generation is low, and it was caused by temporary shutdowns or weather conditions, there may be no need to unduly lower the equipment’s value.

In practice, when possible we check monthly generation for multiple years. Viewing data by month makes it easier to grasp the effects of winter snowfall, the slump during the rainy season, the impact of high temperatures in summer, and shadow effects in autumn and winter. Problems that are not visible from the annual total can become clear in monthly data. For example, if generation drops sharply in a particular season every year, there may be hidden issues such as shading from nearby trees or terrain, overgrowth of grass, snow removal, or problems with equipment layout.

Comparing projected power generation is also important. Sales materials may include power generation simulations or expected generation figures, but you need to check their underlying assumptions. Depending on how solar irradiance data, system capacity, orientation, tilt angle, loss conditions, consideration of shading, temperature losses, degradation over time, and downtime rates are treated, the projected values can vary greatly. If actual generation is lower than expected, confirm whether the difference can be reasonably explained.

Check not only the generated output but also its relationship with the amount sold. There can be discrepancies between the generation measured within the power plant and the amount of electricity sold as confirmed by the electricity meter. Causes include internal equipment losses, outages, communication data loss, and differences in measurement locations. When comparing used properties, it is important to make clear which data is being used as the reference. Whether the figures come from the generation monitoring system or from billing/meter-reading records affects their reliability and how they should be used.

Also, even if historical generation has been stable, the same level may not continue in the future. Output degradation of solar panels, deterioration of power conditioners, faults in cables and connections, deformation of mounting structures, ground changes caused by poor drainage, and other issues mean the risk of performance decline or outages increases over time. Past performance is important, but it must be evaluated together with future operational risks.

When comparing prices, it is important not to take actual power generation figures merely as promotional material, but to use them as a basis for verifying the reproducibility of revenue. Properties that have a stable track record, whose causes can be explained, and that are consistent with the condition of the equipment are worth considering even if their price appears somewhat high. On the other hand, properties with insufficient performance data or where the reasons for reduced generation are not explained should not be judged by surface price alone.

Evaluating equipment aging and replacement risk

In used solar power plants, how the equipment’s aging is assessed becomes the central focus of price comparisons. A plant is equipment that operates outdoors for long periods and consists of many components, including solar panels, power conditioners, junction boxes, cables, mounting racks, foundations, fences, and monitoring equipment. Even if there appear to be no visible problems, deterioration may have progressed in the details.

First, what should be checked are the installation year, model, warranty status, and replacement history of the major equipment. Since solar panels experience long-term output degradation, evaluate them by combining the number of years since the start of operation with current power generation performance. Surface soiling, cracked glass, frame deformation, backsheet deterioration, sagging wiring, and connector degradation are also items to check. There are limits to what can be visually confirmed on site, but it is desirable to carry out on-site inspections as much as possible rather than judge based solely on photographs.

Power conditioners are equipment that require particular attention in used properties. Because they are directly tied to the operation of the entire power plant, check their shutdown history, error history, replacement history, and whether there is a maintenance contract. If they have been in operation for many years, replacements or repairs may be required in the future. Even if they are currently operating normally, it is necessary to evaluate factors such as the availability of spare parts, whether repairs can be performed, whether they can be replaced with equivalent units, and the grid interconnection procedures at the time of replacement.

The condition of cables and connection points is also easily overlooked. At solar power plants, cables are exposed over long periods to ultraviolet light, wind and rain, temperature fluctuations, animal damage, and the effects of grass-cutting operations. Deterioration of sheathing, poor fastening, contact with the ground, damage to conduits, and loose connections can lead to generation losses, shutdowns, or accidents. Even if a used property appears inexpensive, if repairs to such electrical equipment are required, the burden after acquisition can become significant.

The condition of the racking and foundation is also important. Even if the solar panels are installed correctly, corrosion of the racking, loose bolts, settlement, tilting, scouring around the foundation, and poor drainage can affect long-term safety and power generation performance. In particular, on sloped sites, developed land, weak ground, snowy areas, and high-wind regions, it is necessary to carefully check the condition of the racking and foundation. For used properties, past construction quality and maintenance status remain as current risks.

Monitoring devices and communication equipment should not be overlooked when comparing prices. Whether you can check power generation remotely, receive notifications in case of abnormalities, retrieve historical data, or whether communications are stable affects the efficiency of operations and management. At properties with inadequate monitoring, it may take longer to notice a shutdown, resulting in lost opportunities to sell electricity. Even if a used property's documentation includes power generation records, it is important to confirm whether there is a system in place to continuously acquire that data.

When evaluating equipment deterioration, you need to consider not only whether something is broken right now, but also which pieces of equipment will come due for replacement during the remaining period after acquisition. Even if the price is low, a property where major equipment replacements will coincide in the near future is not necessarily a bargain overall. Conversely, properties with proper repair histories and recorded equipment conditions have the advantage that operational risks are easier to assess, even if they appear expensive.

Reflect land conditions and management burden in the price

When comparing the prices of used solar power plants, you must check not only the equipment but also the land conditions. A solar power plant is a business asset with equipment installed on land. Therefore, the shape of the land, slope, drainage, road access, surrounding environment, vegetation overgrowth, snow accumulation, risk of landslides, and ease of management directly affect power generation and operation and maintenance costs.

Even for power plants with the same installed capacity, the operational burden can differ greatly between flat, easy-to-manage land and steep land where drainage and grass cutting are difficult. On sloping land, rainwater runoff can wash away soil or cause scouring around foundations. If site development is in poor condition, it can lead to tilting of the racking or collapse of access paths. With used properties—because they have already been in operation for several years or longer—an on-site inspection may reveal weaknesses in the land.

Drainage conditions are particularly important. Areas where puddles remain after rain, places where drainage channels are prone to clogging, locations where sediment flows in, and slopes that are likely to collapse all pose a maintenance burden. Water also contributes to equipment deterioration. If water is affecting cable conduits, around junction boxes, foundation areas, walkways, or fence footings, long-term repairs may be necessary.

Ease of mowing and weed control is also important when comparing prices. On land where grass grows easily, reductions in power generation due to shading, increased labor for maintenance, outbreaks of pests and vermin, and the risk of cable damage are all higher. Configurations where people cannot easily get under the panels, where access paths are narrow, sites with steep slopes, or sites where weeds can easily invade from surrounding areas increase the effort required for maintenance. In sales materials for used properties, an overview of the power generation equipment may be provided, but the frequency of mowing and the ease of management are not always explained in sufficient detail.

The surrounding environment also needs to be checked. Whether trees on adjacent land have grown to cast shadows, whether new buildings or structures might be built nearby, whether access from the road is good, whether maintenance vehicles can enter, and whether the site can be accessed in winter or during rainy weather—these points greatly affect actual operation. Power plants with poor access require more time for inspections and emergency responses, which can result in longer downtime.

Land rights are also closely related to the management burden. You need to confirm whether the land is owned or leased, and if leased, check the contract period, renewal conditions, land rent, restoration obligations, consent to transfer, and usage restrictions. Even if the equipment is valuable, if the conditions for land use are unstable, the overall value of the power plant will decline. This is especially true for used properties, where past contract terms can be complex, so it is important to confirm them in writing.

Land conditions affect both power generation and maintenance costs, so they are a factor that should always be reflected in price comparisons. Rather than judging solely by installed capacity or electricity sales records, confirming that the plant is located on land that can be managed safely, efficiently, and without undue effort in the future will help you choose a used property you won't regret.

Confirm uncertainties in contractual and rights relationships

With used solar power plants, it is essential to verify not only the equipment and the land but also the contractual and rights-related matters. Even if the equipment looks to be in good condition and the power generation record is strong, a property with contractual uncertainties can become a major risk after acquisition. A solar power plant is built on multiple contracts and rights, such as power purchase agreements, land agreements, maintenance contracts, remote monitoring contracts, insurance, relationships with financial institutions, and administrative procedures.

The first thing to check is whether the rights related to selling electricity can be reliably transferred. Verify that certification information for the power generation business, equipment information, generation output, installation location, operator information, start of operations, and so on match the actual equipment. If there are discrepancies between the information in the documents and the registration records, problems may arise during name changes or succession procedures. When comparing prices of used properties, these procedural uncertainties should also be included in the assessment.

Rights related to the land are also important. If the property includes ownership, you will acquire the land itself, but you need to confirm the boundaries, land category, road access, statutory restrictions, security interests, and relationships with neighboring properties. For leased land, the remaining term of the lease agreement, renewal conditions, consent on transfer, contract termination conditions, rent revision, and restoration obligations are important. If the land-use period is shorter than the remaining power-sales period of the generation equipment, it may impede business continuity.

Also check the contents of the maintenance contract. More important than the name of the current maintenance company is the scope of inspections, whether there is emergency response, whether mowing and weed control are included, whether checks of monitoring equipment are included, and whether records of annual inspections are retained. Also confirm whether the contract can be transferred, or whether a new contract will need to be signed after purchase. For properties that have not been adequately maintained, there may be defects that have accumulated and are not apparent at the time of acquisition.

You should also confirm whether insurance is in place and what the coverage includes. Power plants face various risks, such as natural disasters, lightning strikes, wind damage, snow damage, theft, and damage to third parties. Whether there have been past accidents or insurance claims can also provide clues about the condition of the property. If past accident history has not been adequately disclosed, on-site inspections and equipment diagnostics should be conducted more carefully.

Verification regarding financial institutions and collateral is also important. If security interests are placed on equipment or land, you must confirm how they will be released upon sale. The seller’s circumstances may also delay delivery or the transfer of title. You also need to confirm the contract’s delivery conditions, allocation of risk, representations and warranties, handling of defects, and the authenticity of documents, together with the price.

Even if the price of a used property looks attractive, if contractual or ownership relationships are complicated, the actual risk is higher. Conversely, properties whose documentation is well organized, whose procedures are clear, and for which past operational records remain offer relatively greater reassurance. In practice, it is very important to evaluate not only the price but also whether the property can be handed over and operated without problems after acquisition.

Visualize on-site conditions through surveying and recording

When comparing used solar power plant properties, on-site inspection is indispensable, not just document review. Power generation, equipment capacity, feed-in conditions, and contract documents are important, but there is much on-site information that cannot be learned from documents. Panel tilt, racking misalignment, ground subsidence, poor drainage, overgrowth of vegetation, fence damage, condition of access paths, property boundaries with neighboring land, and shading conditions are often things you only discover by inspecting the site.

In on-site inspections, it is important not just to take photos but to record what was checked and where. When comparing multiple used properties, even if you end up with a large number of site photos, it can become difficult later to understand their relative positions. If you cannot tell which row of panels, which junction box, which slope, or which drainage path a photo shows, the images become hard to use for internal sharing, confirming with the seller, or requesting repair estimates.

Therefore, it is effective to record on-site conditions linked to location information. For example, organize locations where mounting structures have settled, where shading from vegetation is a concern, where fences are damaged, where drainage is pooling, and where cable exposure is suspected, together with coordinates or positions on site drawings. This makes them easier to use as the basis for price negotiations and repair planning.

The surveying perspective is also important. In solar power plants, site boundaries, equipment layout, slopes, access routes, drainage paths, and elevation differences affect operation and maintenance. For used properties, the original drawings and the current condition may not match. By understanding the current condition—such as terrain changes after land development, additional equipment, removed equipment, changes to access routes, and vegetation or structures near boundaries—you can identify discrepancies with the available documentation.

Records of on-site inspections are useful not only for purchase decisions but also for post-purchase management. If you document the condition at the time of acquisition with photos and location data, you can compare subsequent deterioration or changes. Accumulating records of conditions before and after mowing, after heavy rain, after snowfall, and after inspections improves the accuracy of management. For used properties, past management histories may not be fully transferred immediately after acquisition, so it is important to create your own baseline record of the current condition.

Even in price comparisons, on-site records are useful. Properties that appear similar based only on power generation and contract terms can differ in the number of areas requiring repairs and the management burden once the on-site condition is checked. Conversely, a property that looks somewhat unfavorable on paper may be well managed on site and have equipment in good condition, making stable operation easier.

During on-site inspections, combining a professional electrical inspection with geotagged photo records, simple surveying, verification of equipment layout, and checks near property boundaries can improve the accuracy of price assessments. For used solar power plants, a fair comparison can only be made after reconciling the figures in the documents with the actual conditions on site.

Summary

When comparing prices of solar power plants among used properties, you should not judge by the superficial price alone but comprehensively review the power purchase conditions, actual generation performance, equipment condition, land conditions, contractual relationships, and on-site conditions. Because used properties already have an operational track record, there is more material to base judgments on, but you also inherit past management practices, equipment degradation, and contractual uncertainties. Therefore, it is important not to accept the conditions stated in the documents at face value, but to verify them against the actual situation.

First, check the terms for electricity sales and the remaining contract period to align revenue assumptions. Second, compare actual generation with projected generation to confirm whether stable power generation can continue in the future. Third, assess equipment aging and replacement risks and take into account repair burdens that may arise after acquisition. Fourth, evaluate land conditions and management burdens to determine whether the site can be operated as a power plant over the long term. Fifth, verify contractual and rights relationships to determine whether the business can be transferred without issues after purchase. Sixth, visualize on-site conditions through surveys and records to identify risks that cannot be discerned from documents alone.

Used solar power plants that appear cheap are not necessarily advantageous, and those that appear expensive are not necessarily overpriced. What matters is breaking down the conditions behind the price and comparing future revenue, repairs, maintenance, contracts, and on-site risks on an equal footing. Especially when operational staff need to explain internally, they should be able to concretely show “why this property's price can be considered reasonable” and “which risks were factored into the decision.”

To do that, improving the accuracy of on-site inspections is indispensable. Not only photos but also records with location information, simple surveying, verification of equipment layout, and understanding boundaries and drainage make comparisons of used properties more practical. LRTK, as a smartphone-mounted high-precision GNSS positioning device, can be used for on-site inspections of solar power plants, recording equipment locations, and visualizing management points. If you want to compare prices of used properties more accurately and retain on-site data that also contributes to post-purchase management, incorporating LRTK as a recording method for power plant surveys is effective.