Solar Asset Management in 2021: Asset Bankability and Plant Performance

Originally posted by SolarPlaza in the Solar Asset Management in 2021 whitepaper.

From the minute a solar plant starts exporting energy to the grid, a key concern for asset managers is to ensure it meets its performance targets. The U.S. industry as a whole suffers from an average 6% underperformance, according to research from kWh Analytics, a solar risk mitigation firm. The level of energy loss is around 1% to 1.5% across 50 GW of utility-scale plants surveyed by aerial inspection specialist Heliolytics.

Underperformance thus appears to be mostly a problem for small systems, with figures from the U.S. Department of Energy suggesting a performance shortfall of up to 8%. In any case, the numbers show a clear trend towards asset owners and managers overestimating the likely performance of their plants, with potentially significant impacts on profitability.

Some of the losses seen by asset managers are recoverable, for example, when due to dust or vegetation shading. This category, which Heliolytics CEO Rob Andrews refers to as ‘scope 1,’ includes issues that can be fixed and can be split again into limiting or binary losses. An example of a limiting loss might be an incorrect tracker alignment, which still allows for some production, while a binary one could be something like an inverter failure, which stops operation altogether.

Because of their all-or-nothing impact on production, binary failures are given priority in remediation efforts. And plant performance strategies generally should first seek to deal with scope 1 items, which can account for 1% to 1.5% energy loss within a project, Andrews says. However, a growing concern as plants get older is non-recoverable performance or ‘scope 2’ losses, such as long-term module degradation or erosion of components.

“These are difficult to address because they are not necessarily going to be things that are going to impact on any one stakeholder’s KPIs in any given year,” Andrews says. “However, these things can have a big impact on the long-term performance of a project.”