The Renewable Energy Bankability Glossary

A plain-English glossary of the technical and contractual terms that recur in renewable-energy bankability — yield and performance (P50/P75/P90, Performance Ratio, specific yield, CUF), operations and maintenance (availability, response time, MTBF), contracts (defects liability period, delay vs performance liquidated damages, serial defect, retention) and finance (DSCR, independent engineer).

• P50 / P75 / P90 — probabilities of exceedance: the energy yield expected to be exceeded with 50%, 75% or 90% probability. Lenders size debt against P90 (a conservative case), not P50 (the central estimate).
• Performance Ratio (PR) — the ratio of a plant’s actual output to the output theoretically possible from the irradiance it received — a measure of how efficiently the plant converts available sunlight, independent of resource.
• Temperature-corrected PR — a PR adjusted to a reference temperature, used for short assessment windows (e.g. commissioning) so results are comparable regardless of the weather during the test.
• Specific yield — annual energy generated per unit of installed capacity (kWh/kWp) — a resource-dependent benchmark for comparing sites.
• CUF / PLF — Capacity Utilisation Factor / Plant Load Factor: actual generation as a percentage of the theoretical maximum if the plant ran at rated capacity continuously.
• Transposition factor — the factor converting global horizontal irradiance to the irradiance in the plane of the modules, accounting for tilt, tracking and ground-reflected (albedo) light.
• Degradation / LID / LETID / PID — mechanisms by which module output declines: long-term degradation (~0.4–0.5%/yr), light-induced and light-and-elevated-temperature-induced degradation, and potential-induced degradation.

• Defects Liability Period (DLP) — the period after handover (typically 12–24 months) during which the contractor must remedy defects at its own cost.
• Delay LD vs Performance LD — liquidated damages for late completion (delay LDs) versus for failing to meet a guaranteed performance ratio (performance LDs) — drafted separately and capped.
• Serial defect — the same root-cause defect appearing across a threshold share of a component population (e.g. ≥5% of panels), obliging rectification of all units — even those not yet failed.
• Retention — a percentage of each payment withheld as security, ideally released only once the plant is generating and performing.
• Taking-over / COD — the point at which the plant is accepted and commercial operation begins, transferring risk and triggering warranty and performance obligations.