How much money did you lose last year on your solar investment?
In California alone, we’ve seen 21 gigawatts of solar (photovoltaic) installed, representing $42.7 billion in capital investments. The deployment of these systems is only the first step in the effort to control and reduce energy costs. For these investments to truly make a difference to your bottom line and realize their expected energy cost savings, these systems must be well managed through the course of their operational life. If not properly managed, these systems can present significant exposure to the risk of substantial financial losses.
Here are the top 5 ways, solar owners lose money:
1. Undetected Outages “Do you know if your system is on?”
I had a conversation just the other day with a California city official who shared with me that they recently discovered that one of their solar inverters had been down. Upon further investigation, they realized that this inverter had been down for not days, not weeks, but for three years. With proper management and daily monitoring, this outage could have been discovered and corrected early. However, in this case, without a well-executed management plan, this agency was left exposed to this extremely painful loss of production and energy cost savings. Click here to find out more about how something like this happens.
2. Extended Outages “How long would it take you to get your system back online?”
Let’s say a manufacturer defect in a central component caused a total system outage. Do you have the resources to quickly, safely, and accurately troubleshoot the root cause? Do you know who would be responsible for the cost of repairs? Do you know if this repair would be covered under an installer or manufacturer warranty? Do you have the internal resources to drive timely performance from these parties? To put this in perspective, for every week that a 200 kilowatt solar system is not producing in California, about 6,000 kWh of energy production and approximately $1,200 in electricity bill costs are lost. Having the experience, plan, & resources to quickly respond to outages is imperative to minimizing loss risks.
3. Marginal Underperformance “Can you tell if your system is performing as it should?”
Detecting an outage in most cases is rather simple. However, marginal underperformance can prove much more challenging to detect. For instance, if all of your inverters on a given system are producing, but several of those inverters have one or two strings of solar panels that have stopped producing, it may not be obvious when examining a daily production report or real time power generation display. When examining performance over the past month, underlying causes of underperformance can be difficult to pinpoint between weather impacts, soiling, or minor equipment failures. Yet, these marginal underperformances can add up quickly to significant losses. Let’s say that you own 2 megawatts of solar, that (due to undetected string level outages and minor soiling) underperforms by 5% over the summer (May – August). This marginal underperformance will cost you about $13,800 in increased utility energy costs that otherwise would have been avoided.
4. Unclaimed Performance Guarantees “Does your installer or PPA Provider owe you money?”
Many solar systems were installed under an installation contract or a power purchase agreement (PPA) that included a performance guarantee, a schedule of guaranteed production (kilowatt hours) for a given number of years. In cases where systems fall short of these targets, the guarantor (installer or PPA provider) is responsible to pay out a stated amount per kilowatt hour to the site host. Because of personnel changes, time constraints, and lack of visibility into the performance of their energy systems, many organizations are sitting on unclaimed performance guarantee payments.
5. Neglected Maintenance “Is your solar equipment warranty still intact?”
Regular maintenance practices such as visual inspections, electrical testing, and panel cleaning optimize performance, stave off outages, and ensure that systems will achieve the longevity and shallow degradation rates that directly impact your energy cost savings. Without regular maintenance, the risks of outages and shortened life spans increase dramatically. It is also important to note that most solar equipment warranties require regular maintenance as a condition for being able to issue a warranty claim in the event of a manufacturer defect. Unless you have a thorough and properly executed regular maintenance plan in place, you are sure to see thousands in what would have been otherwise avoidable losses.
At TerraVerde Energy, our Asset Management team partners with public & private sector clients to ensure that they realize the maximum financial benefit from their energy systems. Our dedicated, experienced team actively monitors our fleet of solar and battery systems daily, responding to reactive maintenance needs, managing preventive maintenance schedules, and providing regular performance reports to our clients. We optimize the performance and management of these systems so that you can realize maximum savings with the minimum amount of time and resource investment.
For a free copy of an example performance report, and to learn more about our Asset Management Services, email us at email@example.com.