How solar O&M costs fell 50% – pv magazine usa

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Robb Wilson of sPower has seen the field evolve with technology and has shared some of the institutional knowledge he has gained over the years.

Robb wilson of sPower – which owns 1,340 MW of solar photovoltaic projects, including 1,240 MW managed by the in-house “sPower Services” Operations and Maintenance (O&M) team – presented at PV Operations Dallas 2019. His presentation covered a history O&M budgets, a component level summary of those budgets, a sample budget, and an overview of how “ancillary costs” are actually calculated.

One of the clear messages from Wilson’s presentation was that the slow development of institutional knowledge, and not the effectiveness of the modules as specifically requested, had the most significant effect on lowering the costs of operation and maintenance.

Wilson noted that some of the sales of large solar projects in its early days at FirstSolar included “all-in” O&M budgets priced at $ 10-18 / kWdp / year. All in is defined as the assumption of all operation and maintenance work, as well as the risk of warranty / replacement of the equipment. These all-inclusive budgets were structured this way by groups like FirstSolar, as they made the modules, developed the project, worked with the inverter manufacturers, and built the project – so they were confident in their ability to take the risk. . They also worked this way because the big pennies buying the projects didn’t have enough history to base their purchases on and needed this type of contract to balance the risks.

As the industry has evolved, with operations and maintenance teams now generally separated from those who develop and build projects, the allocation of risk has changed from the previous agreement. This meant that the risk had shifted to the project owners, which lowered the prices of O&M contracts. During this progression, the prices for solar energy operation and maintenance have gone from $ 10-18 / kWdc / year to $ 4-9.50 / kWdc / year – over 50%.

Now there are fixed and unforeseen parts of the contract that are budgeted for. Wilson suggested values ​​ranging from $ 3 to $ 6 / kWdp / year for the fixed portion of labor, and unforeseen costs (which Wilson says are estimated based on relationships and experience by compared to data) from $ 1 to $ 3.50 / kWdc / year.

In addition, thanks to experience and new technologies, the techniques and risks of operation and maintenance have evolved. For example, Wilson said that at one point his team thermally scanned hardware and visited sites six times a year to gain insight into performance – but slowly discovered that those scans were not generating value equivalent to their costs, and – slowly, but steadily – remote monitoring has now largely replaced site visits.

The budget cut example above comes from Wilson’s presentation. One of his observations is that there should be an escalator, as much of the operation and maintenance is based on labor costs. This contradicts the idea that many have of the absence of an escalator due to the drop in material costs.

Asked about budgeting for substations and high voltage O&M, Wilson said his schedule included work on all aspects of the equipment except power lines. Also, the budget is a bit more complex than the single line pictured above – for example step-up transformers have a multi-year O&M schedule that includes one-year fuses, maybe replacement of the ones. gaskets and oiling the following year, followed by a possible replacement at another time.

Going back to the institutional knowledge line of thought, throughout Wilson’s presentation he referred to the fact that his teams are continually learning and that learning always strongly influences his prices, actions and judgments. For example, he noted that if your warranty information in your contracts said “to manufacturer’s specifications,” he would think you don’t actually know the O&M requirements. By going deeper into the details of these topics, he is able to strengthen discipline in pricing and management, as well as put pressure on developers for pricing and procurement, as not all manufacturers have the same requirements. O&M.

Asked by this pv magazine United States author of what it looks like, as sPower does, to get investments from conservative partners such as pension funds, Wilson noted:

First of all, we are linked. Plus, there’s a part of the sales process that’s a literal demonstration of the operation and maintenance process – you introduce them to the guys who work on the factories. However, it ends when they look at the numbers – we say “here is our history” – and that’s when we gain confidence with these types of investors.

In our continued coverage of the meat of running solar power systems (versus handsome headlines of the latest, best, cheapest, and future), we hope to fill in the gaps in our knowledge about the risks of fire, wind defenses and changing operating and maintenance practices. This knowledge is new knowledge because our industry is new; of the ~ 75 GWdc installed in the United States – about 50% has been installed in the past three years, and this volume could double before the effects of the investment tax credit wear off.

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