The new measure may increase the all-in costs of large utility solar potentially resulting in system design changes.
Cost pressures have long played a significant role in project development and technology innovation. Developers, designers, and builders have consistently sought to find a penny here, or half-a-cent there, incrementally driving the cost of solar lower. In this instance, developers may be looking to find upwards of $0.10/W in savings for existing projects in the development stage, almost all at once, in order to keep projects viable. Some projects may face significant redesign or restructuring — others may be cancelled altogether. Despite the changes in the market, contractual, tax equity, and/or other project deadlines will remain fixed for some projects, meaning any changes will happen rapidly to keep the overall projects on schedule. That’s why project stakeholders will need to have a strong grasp of project risks.
Assessing Solar Risk — Are You Asking the Right Questions?
Whether you’re determining changes to an ongoing project or considering new technologies and innovations for a new project, many of the questions remain the same. Here are five you should be asking.
How is the expected generation impacted? Is there an increase (or decrease) in the uncertainty around project generation? For example, bifacial modules may become more appealing, as manufacturers are advertising gains of well over 10 percent relative to conventional monofacial modules. However, generation modeling techniques and standards are not well established for bifacial modules (relative to conventional standards) and may introduce additional risk in assessing the expected output of a system.
Are there any impacts to the expected operating costs of the system? As a historical example, the introduction of single-axis tracking systems impacted the cost of system operation by requiring maintenance of additional components and communications systems, while at the same time increasing the output of the system. How is the lifetime and reliability of the system impacted? Design, installation, and operation of the system can have dramatic impacts on the expected lifetime, reliability, and uptime of a photovoltaic (PV) system. There are no components of a PV system that we believe to be fully commoditized, and changes to any one component may significantly impact the long-term life of a PV system What are the impacts to the project schedule? The introduction of new technologies or suppliers or changes in providers may have significant impacts on the construction and commissioning schedule of a project. Depending on the contractual and commercial terms, slight changes in project schedule may have significant implications that stakeholders should understand.
What are the impacts on project contracts? Changes to design, operation, and construction can all impact various guarantees, delivery requirements, scopes, and milestones. Due to the complex and interconnected nature of many project documents, changes may cause a cascading effect on finance, operations, construction, power purchase, asset management, procurement, and other agreements. Looking Ahead
As stakeholders adapt projects to meet changing cost demands and seek to answer these (and many other) essential questions, these teams must align with industry experts to quickly and efficiently meet the evolving market requirements.
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