Across the United States, interconnection delays have become one of the most expensive and least understood risks in the IPP business. Hundreds of gigawatts of solar, wind, and storage projects sit in queues waiting for studies, approvals, and transmission upgrade assignments. Some projects slip months. Others slip years. A few never reach commercial operation.

For many developers and operators, these delays quietly erode returns more than fuel volatility or hedge misalignment ever will. This article examines how interconnection timelines break project economics, why the warning signals often arrive late, and what an analytics-driven operator would do differently.

To make this concrete, we use a representative example based on patterns seen across leading renewable operators, including Clearway Energy, who disclosed project slippage, revised COD timelines, and increased transmission-upgrade exposure across several development assets. The issues we describe apply across the sector.

The core problem: delays turn profitable projects into marginal assets

Interconnection delays create a chain reaction inside an IPP.

When a project moves from COD 2024 to COD 2026, it is not simply a scheduling inconvenience. The shift affects revenue timing, financing costs, hedge positioning, equipment contracts, tax credit assumptions, and portfolio allocation. Carrying costs rise with no generation to offset them. Capital sits idle. IRRs compress.

The most painful part is that these financial impacts accumulate quietly. They do not show up all at once. They creep into a portfolio until leadership realizes a multi-year value leak has taken place.

What actually happened inside a representative Clearway-style project

Consider a hypothetical but realistic scenario built from public disclosures and sector-wide patterns.

A utility-scale solar project is accepted into a regional interconnection queue. Expected COD is 2024. Equipment procurement begins. Financing assumptions are locked. Contracts are signed with the expectation of a two-year path to operation.

Then the first study round extends. A transmission upgrade is assigned. The cost estimate increases. A supplemental study adds new conditions. The queue backlog worsens. COD slips to 2025. Later, required upgrades shift again and COD becomes 2026.

By the end of the process, the project still has value, but the economics have changed.

Financing costs increased during the additional years. The project missed a favorable hedge window. PPA pricing may no longer align with the market. Tax credit timing shifted. Capital that should have been deployed into an operating asset sat on the balance sheet instead.

This pattern is common. It is predictable. And it is measurable.

The metrics that should have surfaced early

EAP’s portfolio reviews show that most IPPs do not track interconnection risk with the same rigor they apply to hedging, outage management, or merchant exposure. The metrics are available but scattered.

Key indicators that should be monitored continuously include:

Queue position and process stage.

Study cycle duration, number of revisions, and triggers for escalation.

Upgrade cost variance.

Difference between initial estimates and the most recent study. Cost per MW added. Sensitivity to regional constraints.

COD slippage rate.

Original COD versus projected COD. The delta in months. The financial cost of each additional month.

Carrying cost of delay.

Interest expense, equity carry, and lost revenue from delayed operation.

Contract and hedge timing risk.

Impact of delay on hedge pricing, contract start dates, or merchant exposure.

Portfolio-level capital-deployment drag.

Percentage of total growth capital tied up in delayed projects.

These metrics exist in isolation. The failure is that they rarely exist in a unified dashboard. When they finally rise to executive attention, the timeline damage is already locked in.

Decision points and how management responds

Interconnection risk creates several natural decision points.

Before delays surface.

Operators must run scenario tests on project timelines and regional queue dynamics. They should quantify how a 12-month or 24-month slip alters returns and liquidity.

When studies begin to slip.

Leadership should have predefined thresholds that trigger deeper review. For example, if studies extend more than a defined number of weeks, or upgrade costs exceed a specified percentage, a project review should activate automatically.

When upgrade costs escalate.

IPPs should evaluate alternative transmission paths, site adjustments, project swaps within the portfolio, or strategic deferral. The worst outcome is to continue deploying capital into an asset whose economics no longer justify its place in the portfolio.

When COD becomes uncertain.

Contract and hedge adjustments may be required. Financing may need restructuring. Investor communication should be proactive rather than reactive.

Without a structured playbook, most companies drift into these decisions months later than they should.

Structural lessons for the IPP sector

Interconnection delays teach four recurring lessons.

Lesson 1. Queue risk is a first-order financial variable.

Interconnection constraints define the true development timeline. They should be modeled with the same seriousness as commodity price risk.

Lesson 2. Upgrade cost escalation can turn winners into losers.

A project with a strong IRR can become marginal when unexpected upgrade costs reduce returns. Operators must quantify upgrade sensitivity before committing large amounts of capital.

Lesson 3. Capital allocation hinges on timeline certainty.

Delayed projects trap capital that could be deployed into operating assets. The opportunity cost often exceeds the construction cost.

Lesson 4. Portfolio agility matters more than portfolio size.

The strongest IPPs actively reshuffle projects when queue risk changes. They do not remain emotionally attached to a single site or interconnection path.

How EAP builds discipline around interconnection and grid-upgrade risk

EAP’s approach is simple. Make interconnection risk completely visible. Make decisions quantifiable. And turn slow-moving problems into fast-moving signals.

We do this with four capabilities.

A queue-readiness dashboard.

Clear visibility into study stages, upgrade requirements, cost estimates, timing risk, and contingency triggers.

A timeline and IRR scenario engine.

Clients can test “what if COD slips by 18 months” or “what if network upgrades increase by 20 percent” and see the impact immediately on IRR, merchant exposure, and financing costs.

A deployment-readiness scoring model.

Each project receives a score based on interconnection risk, COD confidence, capital efficiency, and revenue timing. This helps executives prioritize deployment.

A decision playbook with predefined triggers.

If cost escalation, study delay, or COD slippage crosses a threshold, leadership receives a clear set of actions. No ambiguity. No late-stage surprises.

The goal is not perfection. It is alignment, visibility, and speed.