Valuing a solar plant in Ukraine: why price per MW is not enough
Compare solar plant values using cash flow, debt, working capital, equipment condition and future investment, with a clear enterprise-to-equity value example.
Jurisdiction: Ukraine. Sources reviewed . Evergreen framework. Next scheduled editorial review: . Material rule changes require earlier review.
Price per megawatt can help organise a comparison. It cannot tell you what a solar plant is worth. Two plants with the same capacity can produce different cash flows, require different repairs and carry very different obligations.
A useful valuation connects the price to the cash the business can generate, the spending needed to sustain it and the risks the buyer will take. Start by defining the object being valued.
Make the comparison consistent
Check whether the seller’s MW figure means panel capacity, inverter power or permitted grid export. Do not compare a price divided by megawatt-peak direct current (MWp DC) with one divided by megawatts alternating current (MW AC).
Next, distinguish enterprise value from equity value. Enterprise value is a value for the operating business before the agreed debt-and-cash adjustments. Equity value is the value attributable to its owners after the relevant adjustments. The definitions in the transaction documents matter more than the labels in a teaser.
For example, a seller may quote a price for its ownership interest while expecting the buyer to refinance company debt and repay a shareholder loan separately. Those payments belong in the buyer’s total funding calculation.
Start with sustainable cash flow
Build revenue from output that can be delivered and the prices that apply when it is delivered. A flat annual average electricity price may misrepresent the value of a plant’s actual generation profile.
Deduct the costs needed to operate the asset: maintenance, site rights, insurance, management, trading and imbalance costs, taxes and other applicable expenses. Allow for replacement equipment and working capital—the cash tied up between paying costs and collecting sales.
Use accounting earnings as evidence, then reconcile them to cash. Article 4 of Ukraine’s Accounting Law applies the accrual principle, so recognised income can differ from receipts. A profitable plant can still need cash to meet its immediate obligations.
Compare the factors that actually change value
Table — scroll horizontally if needed
| Factor | Why the same MW can be worth more or less | Evidence |
|---|---|---|
| Net output | Faults, losses and grid restrictions reduce saleable energy | Metering, technical reports and event records |
| Realised price | Timing and contract terms affect income per MWh | Settlements and sales agreements |
| Collection | Slow or doubtful payment ties up cash | Aged receivables and bank receipts |
| Remaining operating horizon | Short site rights or equipment life may limit cash generation | Land documents and engineering assessment |
| Future capital expenditure | Replacements and upgrades require funding | Condition reports and cost estimates |
| Debt and restrictions | Repayment, security and covenants affect equity proceeds | Financing documents and payoff statements |
Apply these checks before using comparable transactions. Confirm whether a quoted number is an asking price, an agreed price or a completed transaction value. If its basis is unknown, it is weak evidence.
An illustrative comparison
Assume two invented plants each have 10 MW AC of inverter capacity and the same permitted export limit. Plant A produces sustainable annual pre-financing cash flow of €0.70 million; Plant B produces €0.45 million and needs a €0.60 million replacement programme.
The figures are assumptions, not market benchmarks. They exclude value-added tax and do not establish a valuation. They show why a common price per MW can hide a material difference in earnings and required investment.
A full analysis would specify the remaining years, taxes, timing of replacements, cash collection and an appropriate discount rate. Discounting converts future cash flows into a present value that reflects timing and risk. The rate must be justified for the cash-flow currency and risk; it should not be copied from an unrelated market.
Reconcile enterprise value to the purchase price
Here is a separate invented bridge, in € million:
Table — scroll horizontally if needed
| Item | Amount |
|---|---|
| Agreed enterprise value | 6.00 |
| Less financial debt | (1.80) |
| Add unrestricted excess cash | 0.20 |
| Less an agreed shortfall against normal working capital | (0.10) |
| Illustrative equity purchase price | 4.30 |
This is arithmetic, not a required legal formula. The parties must agree what counts as debt, cash, normal working capital and other adjustments. Shareholder loans, overdue liabilities, restricted cash and transaction costs need explicit treatment.
Avoid double counting. If the valuation already deducts future replacement expenditure through cash flows, do not automatically deduct it a second time in the price bridge. Similarly, an old receivable cannot both be excluded from the acquired economics and counted as cash the buyer will collect.
Test the value under disappointment
Use a base case and a downside case. Change the assumptions that matter: output, realised price, collection timing, repair costs and operating horizon. Show the resulting cash shortfall as well as the change in value.
If a value depends on a disputed receivable or a future contract, identify that dependence. The parties may negotiate a separate payment when the cash is collected or the condition is achieved. Such arrangements need clear definitions and legal drafting.
The strongest valuation explains why a price is supportable and where the conclusion could change. It does not turn a forecast into a promise.
Your next step
Define your acquisition budget separately from debt refinancing and future investment. Share your investment criteria with Tillerstone to compare opportunities on a consistent basis.
Legal source checked through Mitralex on 25 September 2026. All numbers are synthetic. This article explains an investment analysis method and is not a formal valuation report.