may 2012 evolution of solar operating practices: …...may 2012 evolution of solar operating...

May 2012

Evolution of Solar Operating Practices: Advanced O&M Benefits from Module-Level Monitoring Solution Deployment Brief

By Eric Paul and Don Bray


© 2012 AltaTerra Ltd., www.AltaTerra.net. This report is based on information gathered at the time of writing, through primary interviews, and available research from business, institutional, and governmental sources. In the event of material factual errors, corrections will be posted at www.AltaTerra.net. Perspectives expressed reflect our judgment at writing and may change as the market develops and new data becomes available.

Overview As the solar industry continues to grow and evolve, corrective strategies for operations and maintenance (O&M) are being replaced with more advanced preventative and condition-‐based regimes. In this report, we examine the role detailed performance monitoring solutions are playing in advancing O&M capabilities, and improving overall financial returns. High-‐resolution data from module-‐level monitoring supports point diagnosis of equipment issues, and continuous operations and maintenance analytics. Though the use of module-‐level monitoring in advanced O&M regimes is still at an early stage, financers, system owners and operators are realizing a range of related benefits.

AltaTerra Research conducted in-‐depth interviews with a diverse group of practitioners, on O&M practices at commercial and smaller-‐scale utility solar electric facilities. Building upon available research from EPRI and others, interview questions covered the evolution of O&M practices, and explored current and planned use of module-‐level monitoring tools. Associated benefits were compiled from initial and follow-‐up interviews, and include reduced system downtime, improved performance, streamlined labor costs, and better financing terms. Based on these prospective benefits, module-‐level monitoring coupled with advanced O&M capabilities has the potential to reduce O&M costs on the order of three to ten percent and increase the financial performance of a solar energy facility (SEF) by a range of one to five percent before taking into account the cost and upkeep of the monitoring equipment. Contents

1. Introduction

2. Rising Importance of Operations and Maintenance Practices

3. Current O&M Practices and Trends

4. Module-‐level Monitoring and Advanced Operating Capabilities

5. Quantifying Prospective Benefits

Notes & Resources This 15-‐page report presents original analysis based on interviews with 14 individuals involved in solar O&M practices at commercial facilities. Support for development of this report was provided by Tigo Energy Inc.

To download this report, please visit the website: http://www.altaterra.net.

Use of any material excerpted from this report must be attributed as follows: Evolution of Solar Operating Practices: Advanced O&M Benefits from Module-‐level Monitoring, AltaTerra Research, May 2012


© 2012 AltaTerra Ltd., www.AltaTerra.net. This report is based on information gathered at the time of writing, through primary interviews, and available research from business, institutional, and governmental sources. In the event of material factual errors, corrections will be posted at www.AltaTerra.net. Perspectives expressed reflect our judgment at writing and may change as the market develops and new data becomes available.

1. Introduction

As the solar industry continues to grow and evolve, corrective strategies for operations and maintenance (O&M) are being replaced with more advanced preventative and condition-‐based regimes. This is a result of rapid growth in the size and number of solar electric facilities (SEFs), and a need for better long-‐term asset ownership practices. Increasingly, owners and operators are looking to optimize overall financial returns, by maximizing system output while streamlining O&M costs.

In this report, we examine the role and value of detailed performance monitoring solutions in advanced operating and maintenance regimes. High-‐resolution data from module-‐level monitoring solutions is being utilized for remote, real-‐time identification and point diagnosis of a wide range of maintenance and equipment-‐related issues.

In addition, detailed system data is being used for continuous analysis and visualization of system performance, and to support improved capabilities in areas such as warranty and risk management.

Methodology

AltaTerra Research conducted in-‐depth telephone interviews with a diverse group of fourteen individuals on O&M practices at commercial and smaller-‐scale utility SEFs, including system owners, operators, developers, financers and investors. Building upon available research from EPRI and others, interview questions covered O&M practices, and explored the current and/or prospective use of module-‐level monitoring tools.

Benefits associated with advanced O&M regimes and module-‐level monitoring were compiled from initial interviews. Follow up interviews were conducted to vet benefits, and assign value ranges.

2. Rising Importance of O&M Practices As described in Figure 1, a number of market trends are driving the need for more effective O&M capabilities in solar facilities.

Figure 1. Solar Market Trends and Capabilities Required

Source: AltaTerra Research In the past decade, the U.S. solar industry has grown dramatically. Cumulative installed solar capacity has increased from less than 50 MWDC in 2001 to more than 2.15 GWDC in 2010. The amount of solar installed annually has continued to grow, passing the one gigawatt level for the first time in 2011. As the number of installations has increased, the average size of non-‐residential solar facilities has increased as well.

The increased size and number of systems has led to the development of portfolio O&M strategies, and a greater focus on efficiently maintaining solar facilities. And as state RPS goals are set to increase in coming years, adoption of solar will continue at scale.


© 2012 AltaTerra Ltd., www.AltaTerra.net 4

Figure 2. Cumulative grid-‐tied solar capacity: 2001-‐2010.

Source: Larry Sherwood, IREC.

Recently, metrics in the U.S. solar industry have shifted away from rated system capacity (kW/MW) to actual energy production (kWh/MWh). Historically, most incentive programs were paid based on system nameplate capacity or installed costs. Of course, this provided little incentive for owners to manage and maximize system output.

Now, it is common for system owners to receive incentive payments based on the energy a system actually produces. Under such a performance-‐based incentive (PBI) program, owners are motivated to maintain efficient, high-‐performance facilities.

At the same time, developers of solar facilities are taking an increasing interest in long-‐term operations. In the past, developers would often construct a system with the purpose of quickly selling it, and had little incentive to invest in rigorous monitoring, operations or maintenance capabilities. More recently, many developers and utilities have begun

constructing or purchasing facilities with the intention of operating the facility on a long-‐term basis. This increases developer concern for monitoring, system performance and warranty management, degradation, and system longevity.

An increased focus on energy production and long-‐term asset ownership has led to a rise in the use of performance guarantees. Performance guarantees are a risk-‐mitigating mechanism offered by third-‐party system operators to ensure that a system produces a certain level of energy. Performance guarantees place the emphasis for setting O&M schedules on system operators, who are generally better able to gauge and evaluate an SEF’s performance risk. In doing so, operators look to set an advanced maintenance regime to ensure the performance of a system, while minimizing their labor costs.i

Further motivating more robust O&M practices is the experience solar facility owners and operators have gained operating and maintaining SEFs over the past decade. Increasingly, solar owners expect higher system uptime, efficiency, and O&M maturity from in-‐house or third party operators.

Many solar facility owners and operators are now creating in-‐house teams to improve and standardize O&M practices across their facility portfolios. They are working to systematize remote monitoring, and efficiently identify, diagnose, and resolve problems across a wide portfolio of systems. The ability to efficiently operate and maintain an SEF, while improving its performance, is becoming a competitive advantage for in-‐house and third party O&M operators.

The increased focus on O&M has coincided with more attention on the safety and reliability of SEFs. System fires, though rare, present a threat to both the SEF and any structure on which it is mounted. Sophisticated maintenance practices are helping to mitigate the risk of fire and offer facility owners a greater assurance of an SEF’s safety.



As the industry has grown, performance based incentives, savvier owners, an interest in long-‐term asset ownership, and a host of other factors are driving the movement towards more actively maintained and monitored systems.

3. Current O&M Practices and Trends

Within the solar industry, maintenance strategies vary by site, owner, and operator. Yet, as described above, a general trend in the industry is toward more proactive and sophisticated maintenance regimes.

Current Maintenance Strategies

According to the Electric Power Research Institute (EPRI), solar maintenance strategies fall into three general categories: corrective, preventative, and condition-‐based.

Figure 3. Solar Maintenance Maturity Model

Source: AltaTerra Research

Corrective maintenance regimes (CM) address system and component failures after they have occurred. CM trades the prospect of lower labor and maintenance costs for reduced energy production resulting from component issues and/or system failures.

Preventative maintenance regimes (PM) entail routine inspections, servicing, and cleaning at scheduled intervals to minimize downtime and unnecessary production losses. PM can improve performance and reduce the probability of equipment failures, but can also involve inefficient or unnecessary site visits, and higher maintenance costs.

Condition-‐based maintenance regimes (CBM) utilize detailed, real-‐time system performance information to dynamically evaluate and determine when maintenance crews should be deployed. CBM regimes can improve SEF performance and operating efficiency, but require robust remote monitoring and analysis capabilities.

Maintenance strategies and general operation of an SEF are closely linked. Operating a solar facility entails managing a broad variety of elements, including performance, risk, reliability and safety, and warranty enforcement. Maintenance regimes play a critical role in this equation.

While corrective maintenance regimes remain common in practice, preventative and condition-‐based strategies represent a growing trend. Many organizations have implemented a combination of these regimes, blending elements of CM and PM, or PM and CBM.

Choosing the appropriate level of maintenance to conduct is highly dependent on budgetary constraints and a system owner’s priorities. System owners with a stake in long-‐term asset ownership will take an active role in setting an O&M regime and typically budget more for O&M capabilities, to prevent unnecessary downtime and ensure the longevity of a system. Passive equity investors and short-‐term system owners take a more conservative approach to and invest less on O&M—focusing on meeting energy production and financial targets rather than optimizing O&M costs. Third-‐party system operators are oftentimes contracted to ensure these targets are met, but have no incentive to improve a system’s performance above what is stipulated in the O&M contract.



The value of energy produced by the PV system will also have an impact on O&M. In performance-‐based incentive regimes, there is a relatively higher value on energy production and reliability, giving system owners a greater incentive to invest in O&M. Any system downtime or significant loss in system production will result in a loss of revenue and incentive monies. Most system owners and operators strive for very high uptime above 95 percent, but 85 percent uptime is a more realistic figure for many systems.

Optimizing O&M Costs and Improving System Performance

Setting an overall operations and maintenance strategy, and determining when to send out a maintenance crew, requires striking the right balance between improved system performance and higher O&M costs.

Increased O&M costs must be offset by the value of the incremental energy produced, and/or other benefits. Predicting maintenance costs is difficult, and reliant on site-‐specific factors such as location, travel distance, system size, ease of access, and the type of equipment deployed.

Currently, operating and maintaining a commercial-‐scale solar facility of less than one megawatt of capacity costs between $6-‐27 per kilowatt-‐hour, and represents one to five percent of the total cost to finance, install, and operate a facility over its lifetime.ii This wide range is reflective of the different approaches organizations are taking to O&M, and individual site conditions. As a system ages, O&M costs typically increase due to wear and tear. EPRI noted that third-‐party O&M providers will schedule O&M costs to increase anywhere between 2-‐4 percent annually to account for aging.

Figure 4. Solar Operations and Maintenance Costs

System Size O&M Cost ($/kW) % of O&M Relative to “All In” Cost

1 MW and Less $6/kW -‐ $27/kW <1-‐5 %

Source: EPRI

According to EPRI, up to 90 percent of O&M costs are for scheduled maintenance trips, primarily in the form of labor expenditures. Labor expenditures, including time taken to travel to a site, run diagnostics, fix problems, and conduct routine inspections, can vary significantly.

Inverter problems are easily identified and critical to address, as they will take a system offline. System owners budget a specific inverter replacement reserve for such inverter issues. Many inverter fixes do not require complete replacement, but only the replacement of a specific component. Currently, inverter manufacturers are investing significant amounts to improve the reliability of their products.

While inverter issues are typically known and easily identified, other more granular maintenance problems are typically less understood and often under-‐reported. Without more detailed performance information, lower-‐level system and component problems can be persistent and remain unidentified for years, if they are found at all. In this paper, we will focus on reducing non-‐inverter related O&M costs, and improving overall system performance.

EPRI compiled interesting charts from SunPower and SunEdison that help describe and quantify common system problems. In Figure 5, SunPower presents a high-‐level breakdown of lifecycle maintenance costs across its portfolio of SEFs. Not surprisingly, inverters represent the number one cost—accounting for nearly half of lifecycle maintenance costs. Yet, since module-‐level monitoring was not being used in these systems, it is



likely that the maintenance issues associated with modules, wiring, communications and other components are understated. Performance of these elements is not being monitored with the same degree of precision and visibility as the inverter.

Figure 5. Solar PV Plant Maintenance Cost Breakdown

Source: SunPower and EPRI

Figure 6 presents PV system failure areas and their impacts on energy production for SunEdison’s PV fleet of more than 350 SEFs during January 2008 to September 2009. Inverter and AC subsystems are responsible for the largest percentage of failure events and energy loss. DC subsystem issues, such as bypass diodes, CB fuses, combiner boxes, conduits and wiring, and DC disconnects, also represent a greater than ten percent loss in energy. Module-‐specific failure events were low, but similar to the previous chart are most likely under-‐reported.

Figure 6. PV System Failure Areas and Relative Frequencies

Source: SunEdison and EPRI

The Future of Solar Operations and Maintenance Practices

As U.S. firms seek to more efficiently operate and maintain their SEF’s, the larger and more developed European solar market holds some lessons. In Europe, an increase in solar grid penetration and the widespread adoption of performance-‐based feed-‐in tariff incentives have prompted the adoption of condition-‐based maintenance regimes by many companies. Interestingly, the result has been that O&M costs are between 50-‐100 percent higher in Europe when compared to the U.S.iii

Many solar developers and owners have begun to see the value of investing in O&M to improve plant performance and maximize returns. In the future, companies will continue to invest more in the efficient operation and maintenance of their solar facilities—moving from preventative to condition-‐based regimes.



4. Module-‐level Monitoring and Advanced Operating Capabilities

Performance Monitoring Solutions

Monitoring information allows system operators to track current system performance and performance history—essential information for system management and identification of system problems. Facilities can be monitored at different levels of granularity. Determining an appropriate level of monitoring is dependent upon site location, the system owner’s priorities, and desired O&M regime.

Today, a wide range of monitoring solutions are available. Systems can be monitored at the inverter, array, string, or module-‐level. Increased monitoring granularity typically comes at an additional cost, but allows for more detailed information on how a system and individual components are performing. In recent years, the capabilities of monitoring systems have increased significantly, and have been enhanced to offer system owners and operators powerful analytical tools to help identify and remedy system problems more quickly.

Inverter Monitoring

Inverter-‐level monitoring, represented by the dark yellow circle in Figure 7, is the most common monitoring solution used today. Inverter-‐level monitoring determines the efficiency of power inversion and reveals inverter problems, but has a limited ability to identify or analyze problems outside of the inverter.

Array and Sub-‐array Monitoring

Array and sub-‐array monitoring gathers information from DC circuits located at various points within an array. Array and sub-‐array

monitoring allow increased resolution in measuring system performance, and isolation of problems to a particular array—but require a significantly large negative impact before a problem can be noticed.

Figure 7. Solar Monitoring Options

Source: Bryan Banke, Solar Power Partners.

String Monitoring

String-‐level monitoring tracks performance down to an individual string of panels. Typical strings are comprised of eight to eighteen modules. String-‐level monitoring enables root cause determination of many system problems, but cannot specifically pinpoint module-‐level problems.

Module Monitoring

Module-‐level monitoring provides the most detailed and precise information on system performance—providing current and voltage for



every panel in a system. Though some stand-‐alone solutions exist, module-‐level monitoring is typically incorporated with micro-‐inverters or DC power conditioners.

Micro-‐inverters and DC power conditioners offer added efficiency benefits by reducing panel mismatch and ensuring that the loss of one panel does not affect the neighboring panels. Though they offer some of the same benefits, there are important differences between micro-‐inverters and DC-‐DC power conditioners.

Micro-‐inverters convert direct current (DC) to alternating current (AC) at every panel, which is combined and sent to the production meter. Micro-‐inverters eliminate the need for a central inverter, help to eliminate DC wire losses and the need for communication wiring. However, a lack of operating history and reliability concerns have been issues for financers.iv

DC power conditioners are also deployed on each panel but have a fundamentally different architecture than micro-‐inverters. DC conditioners supplement rather than replace the central inverter by using Maximum Power Point Tracking (MPPT) at the panel level to reduce panel mismatch. They also have an added benefit of improving the reliability of the central inverter.v

Module-‐level information provided by these solutions helps identify detailed problems such as module failures or blown bypass diodes. Deploying module-‐level monitoring requires equipment at every module. Additionally, the use of module or string monitoring requires analytical software to make large volumes of monitoring information useful to system owners and operators.

Monitoring system providers have now developed such software, for data analysis, diagnostics, and visualization -‐ and to help prevent data overload. Some software allows system owners to add photos or notes on individual panels, to maintain history on individual panel operation.

Figure 8. Solar monitoring benefits and drawbacks.

Inverter String Module

Benefits -‐ Convenience -‐ Low cost -‐ Track inverter condition and efficiency

-‐ Moderate resolution and precision -‐ Identify root cause of problems to the string

-‐ Highest resolution and precision

-‐ Identify root cause of problems to the module

-‐ Monitor individual panels

-‐ Efficiency benefits* -‐ Improved inverter reliability**

Drawbacks -‐ Poor resolution -‐ Inability to identify string or module problems

-‐ Analytics required -‐ Cost -‐ Increased points of failure

-‐ Analytics required -‐ Cost -‐ Increased points of failure

* When combined with DC power optimizer or micro-‐inverter. **Only for DC power conditioner.

Performance Monitoring Enabling Advanced Maintenance Capabilities

Module-‐level monitoring facilitates establishment of a range of advanced preventative and condition-‐based maintenance capabilities. These advanced maintenance capabilities utilize detailed performance monitoring information to conduct remote, real-‐time diagnostics, dynamically evaluate maintenance trips, and expedite initial commissioning and recommissioning processes.

Detailed performance information allows system operators to conduct many diagnostics virtually—eliminating time spent on site and reducing



the time necessary to identify problems. Operators can remotely identify problems and determine the appropriate remedy before sending out a crew, reducing the time the crew needs to spend on-‐site. Additionally, operators can equip the maintenance crew with the correct parts to fix the problem, or request needed parts before the crew is deployed.

Detailed alerts, which can identify issues down to the module level, permit operators to see detailed problems almost instantaneously. With less granular monitoring, months may pass before such a problem is identified at the next scheduled site visit.

With inverter or array-‐level monitoring, module-‐level diagnostics are rarely conducted. Blown bypass diodes or faulty panels often go unnoticed, and it may not worth the time required to find such problems. Module-‐level monitoring information reduces the time needed to identify and isolate these detailed problems, and makes fixing them more financially feasible.

Over the lifetime of a system, the value of incremental energy losses accumulates. A recent analysis by Ray Burgess of Solar Power Technologies suggested that replacing faulty panels at routine visits for a 100 kW system could save $14,900 in lost energy production over the life of a system.vi

Beyond improving diagnostics, module-‐level performance information allows system owners to dynamically evaluate system performance to determine when to send crews on maintenance trips. Making decisions on when to send out a crew is difficult, especially with a lack of detailed diagnostic information. With greater insight into system problems, operators can use detailed cost benefit criteria to determine whether it is worth sending out a crew for an immediate visit or wait until the next regularly scheduled maintenance trip.

Detailed performance information can also play a role in maintenance planning and the scheduling of routine maintenance visits. Routine

maintenance trips are typically set based on calendar days, and take less account of how a system is operating. Fine-‐tuning this scheduling process with detailed performance data can allow operators to choose the most appropriate time of year for routine visits and the length between visits. If a system is performing exceptionally well, operators may be able to spread out routine visits by an extra month or two.

The same is true for determining panel cleaning. Actual performance information can be utilized to determine the most advantageous time to clean a system’s panels. Panels performance can degrade by one to five percent annually without washing, and panel washing can improve the performance of a system by as much as fifteen percent.vii

Using module-‐level performance criteria, operators can send out a crew to do cleaning whenever the value of the lost energy production exceeds the cost of sending a crew—ensuring a system is being cleaned optimally. Monitoring the effectiveness of panel cleaning is also faster and more precise.

Commissioning and Recommissioning

Commissioning is the process of inspecting and verifying that a system is performing to specifications before it is transitioned to full operation. Commissioning a commercial-‐scale solar facility is a time intensive process typically taking a maintenance crew a day or longer, depending on system size. Maintenance crews conduct detailed inspections of individual components, field test panels and wires, and visually inspect to ensure the system is working properly.

Module-‐level information helps expedite the commissioning process, allowing operators to eliminate field-‐testing of individual panels by using the monitoring system to identify faulty modules. Operators can also use the current and voltage information to test the electrical properties of individual strings as well. Checking the DC strings of a system can represent close to half the time of commissioning. Reducing the need to



conduct on-‐site voltage testing can take hours off the commissioning of a system.

Also, it is becoming more common for system owners and operators to recommission systems. The process entails repeating the commissioning process to ensure the overall system is operating properly. Thus, the same benefits of module-‐level monitoring in the original commissioning process apply. As such, detailed monitoring has the potential to support ‘continuous’ commissioning, whereby performance of all elements in the system are monitored on an ongoing basis.

Additional Operating Capabilities Module-‐level monitoring enables improved operating capabilities for risk mitigation, warranty enforcement, and safety management. Table 9 defines additional new or enhanced operating capabilities.

Figure 9. Operating Capabilities Enabled by Module-‐level Monitoring

Additional Operating Capabilities

Definition

Performance Risk Management

Increased assurance that a system will deliver expected power production. Better management of system performance and third party O&M crews.

System Reliability and Safety Management

Identify and isolate ground and arc faults, which can jeopardize the safety of a system. Identify and prevent system problems before they take a system down.

Warranty Management and Enforcement

Better enforce warranties with more accurate tracking of component failures.

Module Degradation Tracking

Track module-‐level degradation over the life of a system. If a lower module degradation rate can be used, it will result in lower financing costs.

Module-‐level monitoring helps reduce system performance risk by ensuring that the entire system is performing to expectations. With performance guarantees, monitoring is critical in making the guarantee enforceable. Detailed information allows owners to better manage and track how a system and all of the components are operating.

In addition, more owners are utilizing third-‐party contractors for operations and maintenance activities, and the experience and quality of these providers varies significantly. Detailed information on a system’s performance can be used to better track the maintenance conducted by third-‐party crews, and evaluate their overall effectiveness.

From a warranty standpoint, module-‐level performance history information is helping to improve the tracking of module degradation and management of warranties. Currently, it is difficult to enforce panel warranties without conducting extensive lab testing. Suspected faulty panels must be removed and sent back to manufacturers for testing, even if they are thousands of miles away.

Module-‐level information can be normalized with weather and other site conditions to accurately track panel degradation. This high-‐quality information plays a useful role in warranty negotiations to prove the panel is defective.

Module-‐level monitoring solutions can help reduce the safety risk of a solar array. As mentioned earlier, fires at solar arrays have become an increasing concern for system owners and firefighters.

One of the most common causes of system fires is an arc fault, which is also among the most difficult system problems to identify. Module-‐level monitoring provides a high enough level of detail to pinpoint arc faults. Additionally, some module-‐level monitoring solutions now include the capability to shut down current to individual panels or strings when a fault is detected.



Historical module-‐level performance information can also be utilized to more accurately track the degradation of modules as the system ages. While tracking panel degradation is still difficult, detailed information will reduce the uncertainty of how modules will degrade. System modeling is very sensitive to changes in module degradation rates. System owners and developers can receive better financing terms, if they can use the historical module-‐level performance data to convince the independent engineer to give them a lower degradation rate.

5. Quantifying Prospective Benefits

In our interviews, solar system investors, developers and operators described a range of benefits associated with advanced operating and maintenance capabilities enabled by module-‐level monitoring. These include reduced financing costs, labor cost savings, improvements in system uptime, improved system efficiency, and equipment cost savings. Figure 10. Potential Benefits of Advanced O&M Capabilities Enabled by Module-‐level Monitoring, Relative to Inverter Monitoring

Figure 10 represents the relative benefits of module-‐level capabilities when compared to inverter-‐level monitoring. Follow up interviews were conducted to determine and vet the relative range of these benefits.

A key benefit of module-‐level information comes from enhanced support of advanced maintenance regimes and capabilities, which have the potential to reduce O&M costs on the order of three to ten percent. Additional benefits include improvements in other operating capabilities such as risk management and warranty tracking.

Based on the complete range of prospective benefits, module-‐level monitoring coupled with advanced O&M capabilities has the potential to increase the financial performance of an SEF by a range of one to five percent before taking into account the cost and upkeep of the monitoring equipment.

Financing

From the perspective of the financers interviewed, module-‐level monitoring helps reduce system performance and safety risks of an SEF, making it a safer investment. David Williams of CleanPath Ventures noted that the ability to remedy module-‐level problems quickly and quantifiably improves the expected energy production of a system, and can allow developers to raise incrementally more capital. Another financing benefit mentioned was the ability to more accurately track module degradation—an important factor in the models that determine how much financing is provided.

However, the financers noted that module-‐level monitoring components must match module warranties or be incorporated into modules, to be the most effective for financing purposes. And some financers are still hesitant to accept the technological risk of the module-‐level monitoring technologies.



Yet overall, these benefits have the potential to make a project more attractive to investors and increase available financing by as much as three percent.

Commissioning

System operators and integrators responsible for system commissioning noted the potential for module-‐level current and voltage data to reduce and expedite the commissioning process. Jaret Stuart of Helios Energy described utilizing module-‐level monitoring to eliminate the need to field-‐test modules before they are installed.

Operators also saw a benefit in the ability to remotely conduct electrical voltage testing of strings and wiring. However, others noted that this virtual testing couldn’t completely replace the need to manually check and visually inspect combiner boxes and wiring.

In another instance, Kevin Lampo of SunLion Energy Systems described how module-‐level monitoring helped identify a string that the installation crew did not connect during the initial commissioning process. He noted that without the module-‐level monitoring, the string might have been left unconnected for an extended period of time before it was recognized.

Potential reductions in commissioning labor costs through the use of module-‐level information are as great as ten percent, according to the solar operators interviewed.

System Uptime

Minimizing system downtime is a universal priority. Improving system uptime by even half a percent can save system owners thousands of dollars in lost energy production revenues.

Operators and owners noted that module-‐level monitoring is one of the only solutions detailed enough to identify many arc faults, which can take a system down if not identified. Additionally, according to Bryan Banke from Solar Power Partners, DC power conditioners lighten the MPPT load on central inverters, improving the reliability of the central inverter.

While concrete data is still limited, a number of interviewees noted that improved maintenance regimes could contribute to an increase in system uptime on the order of zero to one percent.

System Performance

The ability to optimize system performance was another key item of concern for system operators and owners. A number of those interviewed noted that module-‐level information helps to improve performance by enhancing diagnostic capabilities, optimizing panel cleanings, and allowing for continuous analysis of system performance.

One practitioner described saving thousands of dollars in potential lost revenues at an SEF, by quickly identifying and resolving blown bypass diodes. Overall, operators described potential improvements in system performance in the range of three to ten percent, through the use of advanced maintenance capabilities.

O&M Labor Costs

According to many of the system operators interviewed, reduced O&M labor costs are an important benefit of module-‐level monitoring. Remotely tracking a system in real-‐time enables them to identify module-‐level problems and make an informed decision before deploying a maintenance crew—reducing unnecessary maintenance trips and the time spent on-‐site by the maintenance crew. As JR Whitley from Southern Energy Management mentioned, ‘it can be incredibly



frustrating taking hours to trouble shoot thousands of panels to identify a blown bypass diode that requires five minutes to fix.’

When the potential maintenance-‐related labor benefits of module-‐level information are totaled, maintenance labor costs may be reduced by ten percent or more, compared to inverter-‐level monitoring.

Equipment Costs

Lastly, another benefit mentioned during the interviews was the ability to reduce equipment costs through better warranty enforcement. System operators were quick to point out that it is often difficult to identify system components that are underperforming, such as modules.

The ability to determine if a module is performing properly and track it back to the manufacturer can save significant amounts of time and money. When system failures are identified, warranty claims can be a time consuming and contentious process—requiring expensive third-‐party testing and analysis. The module-‐level information can be used as a powerful piece of evidence in warranty claim negotiations.

Kevin Lampo of SunLion Energy Systems described how module-‐level monitoring helped identify three underperforming panels in a system. With a screenshot of information on the panels’ performance from the monitoring system, SunLion Energy was able to receive authorization for the return without the typical lengthy warranty process.

Better equipment maintenance and warranty management offers the potential to reduce equipment replacement costs over the life of a system by up to three percent.

In Summary –Value from Different Perspectives

The O&M capabilities enabled by module-‐level monitoring, and their associated benefits, are valued differently by financers, owners,

developers, and operators. As summarized in Figure 11, these parties have different objectives and outlooks on O&M practices, yet module-‐level information offers important potential benefits for each group.

Figure 11. O&M Values, Objectives, and Benefits for Different Parties

Investor and Financer

System Owners and Developers

System Operators

Objective -‐ Minimize risk (performance and safety)

-‐ Meet power production goals

-‐ Minimize labor costs

-‐ Maximize power production

-‐ Maximize uptime -‐ Improve system performance

View of O&M -‐ Conservative -‐ Varying (Passive to very active)

-‐ Active

Value of Module-‐level Monitoring

-‐ Lower risk profile

-‐ Safer, more reliable asset

-‐ Increased power production

-‐ Improved O&M management

-‐ Increased system performance and power production

-‐ Optimized labor costs

-‐ Competitive differentiation

Equity Investors, Banks, and Other Financers

Module-‐level information offers financers an important benefit by mitigating both the performance and safety risk of a system. Equity investors, banks, and financers’ decisions to invest in solar facilities are motivated by a planned return on investment.

Thus, their primary goal is to ensure a system will meet its power production goals. Improved O&M capabilities reduce operating risks, and help to ensure a system meets its production goals. Detailed monitoring systems make SEFs a safer investment for investors.



Module-‐level monitoring solutions must prove their reliability—through incorporation in modules or partnering with firms with a large balance sheet—to be widely accepted by the financing community.

Developers and system owners

Developers and system owners, who focus on system performance to maximize their financial returns, are benefitting from the ability of detailed performance information to enable more effective O&M management.

Advanced software packages for module-‐level monitoring are making it easier for small staffs to manage a portfolio of facilities. And even small increases in power production enabled by advanced O&M capabilities can result in a significant profit. A commonly cited rule of thumb is that a one percent increase in the performance of a system can translate into as much as a ten percent increase in profit for the developer.

Developers and owners are also able to better identify who is responsible for system problems, enforce warranty claims, and improve system and component modeling using performance history.

Operators

Third party and in-‐house system operators are the group actively responsible for maintaining a system, and benefit directly from module-‐level monitoring. Most importantly, module-‐level information is enabling operators to improve their maintenance regimes with more detailed and advanced diagnostic tools, which helps streamline labor costs. Some operators are benefitting even more by using the real-‐time detailed information to dynamically assess and continuously evaluate system performance.

With O&M practices still evolving and varying widely, the ability to efficiently maintain and operate an SEF utilizing advanced O&M practices

and detailed monitoring is becoming a source of competitive differentiation for operators.



About AltaTerra Research

AltaTerra Research is focused on information technology solutions for sustainable business in the enterprise marketplace. Through market research and education services, AltaTerra helps forward-‐looking organizations improve operational efficiency and capitalize on new market development opportunities.

Specifically, we provide: • Independent, customer-‐focused solution research • Online educational briefings for commercial and institutional

decision-‐makers • Services for target-‐market education, content and case study

development, and customer outreach • Executive-‐level market-‐advisory services

Contact Information

AltaTerra Research 530 Lytton Avenue, Second Floor Palo Alto, California 94301 United States

International Tel: +1 (650) 362-‐0440 URL: http://www.altaterra.net

Twitter: http://twitter.com/#!/altaterranet LinkedIn: http://www.linkedin.com/company/208995

Endnotes

i Mat Taylor and David Williams, “PV Performance Guarantees (Part 1): Managing Risks & Expectations,” SolarPro Magazine. http://solarprofessional.com/article/?file=SP4_4_pg56_Taylor ii“Addressing Solar Photovoltaic Operations and Maintenance Challenges,” EPRI. http://my.epri.com/portal/server.pt?Abstract_id=000000000001021496 iiiIbid. ivBryan Banke, Solar Power Partners, “Solar Electric Facility O&M: Now Comes the Hard Part,”RenewableEnergyWorld.com. http://www.solarpowerpartners.com/PDFs/BankeAssetMgt_REW.pdf v Ibid. viRay Burgess, Solar Power Technologies, “Utilizing Panel-‐Level Monitoring to Improve Project ROI,” Altenergymag.com. http://altenergymag.com/emagazine/2011/12/utilizing-‐panel-‐level-‐monitoring-‐to-‐improve-‐project-‐roi-‐/1836 vii“Addressing Solar Photovoltaic Operations and Maintenance Challenges,” EPRI. http://my.epri.com/portal/server.pt?Abstract_id=000000000001021496

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