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Mergers and Acquisition Services - Quintas Advisory
Cristina Serrano26-Sep-2023 10:00:004 min read

Buying into the game: Mergers & Acquisitions in the second solar boom

Sometimes it seems like everyone wants to be part of the solar sector. The increasing value and volume of renewable energy projects across Europe and the wider world is fuelling a steady climb in the number of mergers and acquisitions (M&A) in solar.

Although the end of 2022 saw M&A activity slowing worldwide due to economic uncertainty, analysts report that the energy sector is slightly bucking the trend, thanks to more companies making deals to advance the transition to renewables. Such acquisitions now represent 27% of all deals in the sector.

As traditional power companies scramble to join the transition to renewables, investors are also attracted by the sector’s relative stability and steady revenues. Add to the mix utility companies who want to address climate change concerns and you have a dynamic market. This flurry of activity requires M&A experts to assist players in the process.


Three essential steps in the M&A process

Essentially, M&A is the process by which one enterprise gains or incorporates another. In the case of solar, M&A normally means acquiring PV projects to add to an energy portfolio.

The process itself varies from case to case, but in general terms there are usually three distinct stages, although outside consultants can support during any of these individually:

  • Technical Due Diligence (TDD): A full audit of a project’s potential legal and technical risks to reassure investors and identify any issues that require attention ahead of a deal. It examines a project’s feasibility regarding production and revenue, any existing contracts or agreements, and the physical aspects of a project, including infrastructure and geography.
  • Negotiations and closing of the Sales and Purchase Agreement (SPA): Upon completion of TDD, a potential buyer will consider the conclusions and, if they decide to go ahead with the acquisition, will start negotiating the terms and conditions of the transaction. Both parties should agree on a way forward to decide the sale price and details of any mutual agreements. From these negotiations, a final purchase agreement will emerge.
  • Implementation: Once there is a formal agreement, it will be necessary to implement clauses concerning any obligations required of either party and to oversee the transfer of assets.

M&A consultants such as Quintas Advisory can offer other discrete services as well, such as Financial Model Reviews and Red Flag Reports. The latter service is a less forensic (and so less cost intensive) version of TDD. Experts scrutinise the potential acquisition for any warning signs that the project contains unacceptable risks. These “red flags” could include challenging technical difficulties, hidden financial issues or regulatory barriers faced by the target company. If these are deemed serious enough to be dealbreakers, then the experts will make sure the client is fully aware. Conversely, a Financial Model Review takes a hard look at the project’s financial prospects – ensuring that the benefits and costs forecasted by the seller for the remaining useful life of the PV plant are both reasonable and achievable.

All these methods are invaluable for giving the investor the information necessary to make a sound decision.


Quintas Advisory and Mergers & Acquisitions: our part in the process

Most companies require the services of specialists in the M&A process, especially within specialised sectors such as Solar. In fact, even the largest companies with a dedicated M&A department will often commission the services of the experts. This is because an outside consultant can take a more objective view of an asset while carrying out TDD. Additionally, the potential buyer may not be familiar with esoteric technology or a site’s geography, and so will seek outside expertise.

At Quintas, over 15 years of experience managing solar assets worldwide has created a pool of expertise available to our clients. Quintas Advisory’s lawyers and engineers thoroughly investigate the asset’s characteristics, assessing how much it can generate and spotting hidden risks so that our clients only make acquisitions that will provide stable returns. Clients can pick and choose which services they require, from complete oversight to any of the elements described above.


Above all, a core function of the team is carrying out TDD for the client before any investor agreement is signed. A perfect example of how well this works can be found this year with ERG Spa, after the renewable energy giant commissioned QA for its acquisition of Garnacha Solar SL, the 149MW solar plant in north-western Spain. After a thorough assessment, ERG felt confident going ahead with the acquisition and announced the agreement in early May. It also commissioned Quintas technical advisors to supervise the construction and the commissioning of the plant.

However, it is very rare to find detailed announcements of M&A deals discussed in public. By its nature, M&A is a process requiring utmost confidentiality. Discretion matters: investors and asset-holders don’t want sensitive commercial information released into the public domain and will normally only reveal that an M&A process has taken place once the deal has actually gone through. If an assessment discovers sufficient problems to scotch the deal, then no more will be said, at least in the public domain. This is a vital aspect of M&A that QA understands and respects, which is why confidentiality lies at the heart of all its work.



Whether you are thinking of buying, selling, or refinancing your energy portfolio with solar assets in Europe, we can help you. Contact us to learn more about our consultancy work.


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Cristina Serrano

Cristina is an engineer specialising in renewable energies. She applies her comprehensive project management skills to boost the performance of PV plants for Quintas Advisory clients.