Solar revenue is not cash: how to check what a plant actually collects
Reconcile a solar plant's generation, settlements, revenue, receivables and bank receipts, and see how payment timing changes acquisition economics.
Jurisdiction: Ukraine. Sources reviewed . Periodic review required. Next scheduled editorial review: . Material rule changes require earlier review.
To understand a solar plant’s income, follow the chain from electricity produced to money received. Generation, export, settled sales, recognised revenue, receivables and bank receipts describe different stages.
For an investor, the central question is not only whether the plant earns revenue. It is whether enough of that revenue becomes cash, on a timetable that supports operating costs, debt and future investment.
Why the accounts and the bank can disagree
Ukraine’s Accounting Law applies the accrual principle: income and expenses are reflected when they arise, independently of when cash is received or paid. Reported revenue can therefore include amounts that remain unpaid. See Article 4 of the Accounting Law.
That difference is not automatically an error. It becomes a transaction issue when payment is late, disputed, uncertain or incorrectly represented as cash already collected.
The opposite can also happen. Cash received this month may settle last year’s sales, represent an advance or relate to something other than electricity revenue. A large bank credit does not by itself show stronger current operating performance.
Build a monthly reconciliation
Table — scroll horizontally if needed
| Stage | Main evidence | Difference to explain |
|---|---|---|
| Electricity produced | Plant operating data | Equipment availability, weather and measurement boundary |
| Electricity exported | Commercial metering records | Own consumption, losses, restrictions and data corrections |
| Electricity settled | Accepted market or buyer settlement data | Timing, allocation, disputes and adjustments |
| Revenue recognised | Contract terms, accounting records and supporting documents | Price, accounting period and gross-versus-net treatment |
| Amount still owed | Customer ledger and aged receivables | Due dates, credits, disputes and impairment |
| Cash received | Bank statements linked to settlement references | Payment allocation, deductions, advances and old balances |
Use the same entity, period and measurement boundaries throughout. Match tax-inclusive receivables to tax-inclusive payments, or adjust both consistently. Do not reconcile value-added-tax-inclusive bank receipts directly to revenue excluding that tax without showing the bridge.
Check the actual sales arrangement
Identify the buyer, price mechanism, settlement timetable and responsibility for imbalance costs. Read the amendments as well as the main contract. Record whether fees are deducted from sales proceeds or invoiced separately.
Where a project claims a support arrangement, verify its specific eligibility, contract and actual payment history. Do not treat the existence of a support mechanism as proof that all invoiced amounts will be collected promptly.
For bilateral sales, Article 66 of the Electricity Market Law provides a legal framework, but the project’s contracts and settlements are needed to establish its particular economics. This article does not assume one sales route for every Ukrainian solar plant.
A simple receivables bridge
The following is an invented accounting illustration. All figures are UAH thousand on a consistent basis, with value-added tax and foreign-exchange movements excluded for simplicity. The sales amount is assumed to have been recognised and recorded in the customer ledger. There are no advances, offsets, write-offs or other movements beyond the credit adjustment shown.
Table — scroll horizontally if needed
| Movement | Amount |
|---|---|
| Opening receivables | 300 |
| Add current-period sales recorded as receivables | 1,200 |
| Less cash collected and allocated to those customer accounts | (1,050) |
| Less agreed credit adjustments | (30) |
| Closing receivables | 420 |
The business recorded UAH 1.2 million of new sales but collected UAH 1.05 million across the customer accounts. The ratio 1,050 / 1,200 equals 87.5%, but it is not automatically the collection rate for the current period’s sales: some receipts may settle opening balances.
To measure collection properly, allocate receipts to the relevant sales periods and invoices or settlement references. Compare each group of sales with what was collected by a stated date. Keep amounts not yet due separate from overdue amounts.
Age the balance and assess recovery
Break unpaid amounts into useful groups: not yet due, recently overdue, older overdue and disputed. Choose age bands suited to the contractual payment cycle and apply them consistently.
For significant balances, request the counterparty reconciliation, correspondence, subsequent receipts and the basis for any impairment or expected credit loss. A signed balance confirmation can support the amount acknowledged; it does not guarantee payment.
Distinguish technical settlement corrections from credit risk. An unresolved volume dispute calls for different work from a confirmed debt owed by a buyer with cash-flow problems.
Ask how much cash the project needs while waiting. A delayed receipt can force additional funding even if eventual recovery is likely.
Reflect the result in the transaction
Agree who receives the economic benefit of pre-closing receivables and who bears the risk of non-payment. In an acquisition of the company, the receivable ordinarily stays on its balance sheet unless the transaction arrangements change its treatment; the price and contractual allocation still need careful drafting.
Avoid paying twice for the same balance through both a valuation assumption and a separate price adjustment. If an uncertain receivable is valued separately, record its collection assumptions and the treatment of costs, tax and later adjustments.
The output of this work should be a short explanation: how revenue is earned, how quickly it is collected, how much is doubtful and how much extra cash the business needs.
Your next step
Include cash-collection evidence among your acquisition criteria. Share your investment brief with Tillerstone to clarify the information required for an operating asset review.
Legal sources checked through Mitralex on 25 September 2026. The numerical example is synthetic and simplified. Project accounts and tax treatment require their own review.