A well-thought-out maintenance strategy gives developers confidence they can generate the renewable kilowatts they sold in their Power Purchase Agreement contract. Utilizing purpose-built maintenance management software provides the developer (IPP) a competitive advantage. Field data and maintenance tasks can be photographed and recorded in real-time and archived for retrieval at any time. Having this critical data to hand gives the offtaker confidence in the transaction.
PV Solar Failure Rates
“On average, solar panels degrade at a rate of 1% each year, which guarantees 90% production in the first ten years and 80% by year 25 or 30.” – Paradise Solar Energy.
Based on this statistic, if the developer sells to an offtaker within 5years, by which time, his solar panels will have degraded by 5%, thus decreasing revenue-generating output. Rates of solar panel degradation increase if not properly maintained and cleaned. The offtaker blindly trusts that the developer has undertaken routine maintenance tasks. What if the developer could provide a substantial record of all maintenance tasks and check adequate cleaning and how often?
How Expensive is Failure?
Andy Walker from the US-based National Renewable Energy Laboratory (NREL) estimates that “the cost of O&M for old solar PV systems, was on average $20 per kW a year, whereas now it is closer to $7.50 per kW a year.” – Power Technology.
The cost of solar panel operations and maintenance is currently at an all-time low. Developments in technology mean critical elements such as inverters are “more reliable with fewer failures”, says Walker. Solar projects are usually associated with modest profit margins. Therefore, it is imperative to maintain low O&M costs to ensure your solar project remains commercially viable.
Let’s say the developer decides to sell the solar system to an offtaker after 5years of neglecting his solar panels. His lack of vegetation management led to a breed of fast-growing weeds swiftly taking over a third of the solar arrays, damaging a number of them in the process. Blossoming flowers left panels dirty and pollen-damaged. This damage can reduce efficiency by up to 30%. Once again, the offtaker is taking on the risk having received no evidence of maintenance management carried out on site.
Become a “super offtaker”
“Offtakers have wide-ranging levels of creditworthiness. At the high-end of the credit spectrum are public companies like Google, Apple or Microsoft. They are like “super offtakers” because they have impeccable, investment-grade credit, and they buy a ton of renewable energy!” – Rob Freeman What is an Offtaker?
Offtakers must demand more from developers. Not only could these long-term project owners accumulate substantial savings in initial maintenance checks, but the offtaker avoids the risk associated with their long-term ownership. There is also potential to gain increased margins from their renewable energy investment.
IPPs are responsible for demonstrating accurate, timely maintenance logs, checks, completed jobs, photo evidence, and data collated from their assets. Often an IPP will subcontract to a maintenance company. The endeavour ensures asset longevity and creates a good relationship between themselves and the offtaker. Built trust helps create a reliable reputation in the marketplace, thus potentially generating future sales via word-of-mouth. It is clear how simple cleaning of a solar panel can reap small percent increases in a generation which add up across a sizeable portfolio of sites.
How can Preventative Maintenance Software Help?
Coast explains that, traditionally, renewable energy asset maintenance relied on pen and paper for routine documentation and data communicated via crude software such as WhatsApp and Excell. While many utilities may have an “if it’s not broke, don’t fix it” mentality, these platforms have proved challenging to track historical maintenance records and take a great deal of time to update and keep teams informed.
Implementing preventative maintenance software demands less time tracking solar array systems manually, makes scheduling work orders simple and allows technicians easy access to historical data at the touch of a button. Incorporated customized alerts suit your site’s unique needs. Tracking work orders and tasks will present comprehensive data trends to help optimize your maintenance strategy, saving more time, money and future failures.
PPA (Power Purchase Agreement)
A PPA (Power Purchase Agreement) is an arrangement that takes place between the Investor, Installer and the Offtaker.
The benefits of this agreement are:
- Long-term financial security.
- Fewer risks are involved for all parties.
- Potential to lead to further investment opportunities
The investor provides the financial investment to develop a solar project in return for a long-term commitment from the offtaker to purchase and installer to develop. This benefits the installer as a way of securing the initial investment to cover start-up costs.
The project developer – or Independent Power Producer (IPP)– identifies an opportunity to develop a commercial solar project, secures permits and maintains a high-functioning photovoltaic solar power station. The IPP will own the asset for a short term (at least 12mo) before selling it.
The offtaker acts as the final step in this process by purchasing the solar farm development from the developer as a more affordable route to accessing renewable energy sources.
In this example, the offtaker is a local hospital that relies on government funding for new energy projects. Governments are incentivized by green energy KPIs to invest in renewable energy and provide financial incentives for investment such as subsidies to developers.
Once the developer has located the opportunity to develop the solar farm (e.g. land or building roof), they can begin to capitalize on the project for tax credit benefit.
While this process remains beneficial for all parties, the offtaker is taking the ultimate risk by potentially purchasing a poorly maintained solar system. The developer isn’t incentivized to properly develop an asset lifetime maintenance strategy while assets are new.
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Maintenance is True Sustainability
60Hertz has designed purpose-built Computerized Maintenance Management Software (CMMS) that automates the tracking and maintenance for assets of small-scale utilities and owner-operators.
An effective CMMS that efficiently digitizes your maintenance program to drive down costs by automating alert triggered work orders, centrally managing field tickets, and more. Click below to connect with one of our helpful team or book a no-obligation demo.