One of the biggest project killers I keep running into especially in utility-scale solar and wind is land and permitting risk. There's alos the issue of interconnection, but honestly, I’ve seen more deals delayed or downsized because of landowner issues, zoning pushback, or environmental red tape.
I’ve worked on models recently where permitting delays added 7 to 12 months. That alone was enough to tank the IRR below investor targets. And in some cases, landowners pulled out mid way through negotiations, which forced redoing layouts and even affected grid routing plans.
There’s a lot of stop-start, and it’s often political.
I try to break down land rights more clearly in my models. Leased land, owned parcels, and “optioned” agreements each come with their own exposure. It helps stakeholders get a clearer view of the real risks.
Sometimes we’ve even had to run alternative scenarios for partial build-outs. Especially when you know upfront that only 60–70% of the original site might get cleared.
Doing basic local policy research early can go a long way local level permitting trends, community resistance, that kind of thing. It’s tedious, but it saves you from major surprises down the line.
How are others handling this? Are you modeling these risks into IRR directly, or just treating them as timeline float? Do you bring in outside permitting advisors early on?
The more I work on these projects, the more I realize how many “soft” risks need hard modeling.