Sam Cotterall
Director of Client Enablement
Annual PPA performance reviews are essential for accountability, but they are late by design.
Most PPA teams do not discover PPA performance underperformance when it starts. They discover it when the reporting cycle closes, after the impact has already occurred and after someone has already had to explain why the numbers moved. Or PPA performance underperformance simply goes undiscovered.
That is not a lack of effort. It is structural. Any period-end cadence creates a built-in delay between what happens in the project and when the organization can see it clearly enough to respond. Monthly energy performance reporting can be thorough, clean, and well governed, and still miss early underperformance because reporting cadence is not the same thing as performance detection cadence.
This matters even more because many teams ultimately manage PPAs to an annual contract-year view of PPA performance. Leadership wants to know whether the agreement delivered expected value across the settlement year and what that implies about PPA performance. That annual view is essential for governance and accountability, but it is also, by definition, late. It is a post-mortem, not an early warning system.
The core issue is timing. Reporting documents outcomes once inputs have settled. Early detection of PPA performance drift requires signals that show deviation before the period closes, whether that period is a month or a year.
Period-end PPA performance reporting exists for good reasons. It is designed to:
That matters for finance teams who need accrual discipline, variance explanations, and controls that stand up in an audit room. It also matters for sustainability teams who need a coherent, repeatable story that will not be revised three times after publication.
The nuance is simple.
Period-end reports are built to explain what happened, not to detect performance issues as they emerge. They convert messy reality into a clean narrative after the period closes. Useful, yes. Early warning, no.
The lag comes from sequencing. This sequencing is why PPA performance issues often become visible only after settlement and reconciliation. A simplified order of events looks like this:
None of that is wrong. It is how PPAs operate.
The consequence is unavoidable. By the time underperformance is visible in a period-end report, the financial impact is usually already locked in. If you are looking at a monthly close, the month is closed and the accrual is booked. If you are looking at an annual contract-year view, whether focused on financial outcomes or asset performance/availability, you are often reviewing outcomes after dozens of operational and market events have already accumulated into a final result.
That is why teams can put serious time into energy performance reporting and still feel like they are reacting. The constraint is timing, not effort.
In most programs, underperformance becomes “real” only after enough time passes that drift is undeniable.
A shortfall starts quietly. Nothing breaks. It just underdelivers. Over time the gap between expected and actual widens, forecasts drift, and the first broadly trusted signal arrives in settlement statements, invoices, or reconciliation work.
Then the rework starts:
This is why late discovery creates a credibility tax. The organization asks, “Why didn’t we know sooner?” even when the honest answer is, “Because our governance view is period-end, and period-end is late by design.”
The longer the cadence, the more the story gets reconstructed in bulk. Annual views make this worse. By the time you are explaining a contract-year miss, you are usually untangling months of interacting drivers, under time pressure, for stakeholders who wanted a simple answer. Most of the time the report provided by the developer is just skimmed (at best!).
Reporting is documentation. Visibility is awareness of PPA performance drift early enough to avoid surprise.
Period-end reporting is strong documentation. Awareness requires earlier signals, not faster packaging of the same period-end artifacts, and not a daily reporting strawman. The goal is not more data volume. The goal is better timing and clarity.
PPA underperformance often starts as small deviations that compound quietly. Period-end reporting tends to treat those deviations as a narrative about the period, not as an emerging signal that deserves attention before the period closes.
This is the difference between performance narration and performance management. Narration explains the past. Management notices drift early enough that the organization is not surprised later.
Price spikes are a useful stress test for PPA performance visibility. During an extreme weather week, finance teams ask a basic question that period-end reporting cannot answer in time:
In wind, that can mean frozen turbines or weather-related outages. In solar, cloud and snow cover, inverter issues, or forced outages. The difference between online and offline during peak can be enormous, and it matters immediately.
Near-immediate operational telemetry changes the order of awareness. Not because it replaces governance reporting, but because it answers event-window questions while they still matter:
The point is not continuous reporting. It is shortening the gap between event and awareness when the stakes are high. Monthly reporting and annual contract-year reporting still matter for governance and reconciliation, but telemetry helps teams avoid waiting for a close cycle to learn what already happened.
The lag hits differently depending on where you sit and how you experience PPA performance day to day.
Energy and PPA owners usually notice anomalies first, often informally:
But those signals can feel hard to escalate when data is preliminary, revisions are common, and stakeholders expect settlement-grade certainty.
Sustainability teams often inherit the issue downstream, when volumes or narratives suddenly need explaining. Finance teams feel it when numbers move, after accrual pressure, visible variance, or a contract-year view that does not match the approval case.
Nobody is wrong. They are observing different layers of the same system at different times, which is why this lag creates tension.
Energy teams feel like they are flagging smoke. Sustainability teams feel blindsided. Finance teams feel like they are handed surprises without warning.
When organizations stop treating period-end reporting as the primary mechanism for performance visibility, a few things improve, even without changing the importance of monthly packages or the annual contract-year view.
You tend to get:
Notice what is not on that list: more reports. The win is timing and shared awareness, not producing extra artifacts.
Monthly review can still be valuable here. It reduces the distance between events and the governance conversation. But it should be treated as a governance and narrative-control cadence, not as the only detection mechanism.
Period-end PPA performance reporting is not the villain. It is essential.
You need a monthly process for governance, auditability, and consistent communication. You need an annual contract-year view for accountability, true-ups, and leadership evaluation. You need settled views for finance and a stable narrative for sustainability.
But period-end reports are not designed to function as early warning. Treating them that way creates an avoidable failure mode. Teams do more and more reporting work, and the organization still learns about underperformance only after the economic and reputational impacts are already in motion.
If your current process reliably tells you what happened last period, it may be doing its job perfectly. The more important question is whether the organization has agreed on how, and when, it wants to notice performance issues before they become month-close or contract-year surprises.
Because the gap most teams feel is not a reporting gap. It is a PPA performance visibility gap.
