Practice Test Geeks(REP) Certified Renewable Energy Professional Practice Test
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Project Planning & Financial Analysis Flashcards

7 cards from real REP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Project Planning & Financial Analysis flashcards as text

  1. Which contract structure transfers the most construction risk from the project owner to the contractor in a renewable energy project?

    Answer: Fixed-price, date-certain, full-wrap EPC contract

    A fixed-price, date-certain, full-wrap EPC contract holds the single contractor responsible for all cost overruns, delays, and performance shortfalls.

  2. An independent engineer (IE) is engaged during renewable energy project financing primarily to:

    Answer: Provide lenders with an independent assessment of technical and financial assumptions

    The IE gives lenders confidence that energy yield estimates, technology performance assumptions, and cost projections are technically sound.

  3. A renewable energy developer uses a 'sensitivity analysis' in their financial model primarily to:

    Answer: Assess how changes in key assumptions affect project returns and viability

    Sensitivity analysis varies one or more input assumptions (e.g., energy price, capacity factor, O&M costs) to quantify their impact on IRR or NPV.

  4. Which federal tax incentive allows renewable energy project owners to depreciate most of the project's cost in the first year of operation under current US tax law?

    Answer: Bonus Depreciation under MACRS

    Bonus depreciation under MACRS allows immediate expensing of a large percentage of qualifying renewable energy asset costs in the placed-in-service year.

  5. A solar project has a total installed cost of $2,000,000 and generates 500,000 kWh annually over a 25-year life with zero residual value and no discount rate applied. What is the simplified LCOE?

    Answer: $0.16/kWh

    LCOE = $2,000,000 ÷ (500,000 kWh × 25 years) = $2,000,000 ÷ 12,500,000 kWh = $0.16/kWh.

  6. In a renewable energy project, 'backfill risk' in the interconnection queue refers to:

    Answer: The risk that projects ahead in the queue withdraw, changing cost allocation to remaining projects

    When projects ahead in the queue drop out, cost allocations can shift to remaining projects, potentially increasing interconnection costs significantly.

  7. Which document legally obligates a renewable energy developer to deliver power to an offtaker at a predetermined price for a specified term?

    Answer: Power Purchase Agreement (PPA)

    A Power Purchase Agreement is the binding contract that defines the price, volume, delivery terms, and duration of electricity sales between the generator and buyer.