In preparation for Solar O&M North America – a comprehensive O&M event that took place in San Francisco from March 25-26 – solar marketing executive Glenna Wiseman published a three-part series on the Solar Power World website that focuses on the evolving O&M market. In today’s post, we’ll provide a brief overview of Wiseman’s series – which includes an interview with RadianGEN’s Joe Kastner, who participated in the conference. In the first part of the series, Solar Is NOT Maintenance Free: The Growing U.S. Solar O&M Market, Wiseman establishes the important point that operations-and-maintenance (O&M) is critical to the success of any solar project and illustrates the key differences between O&M and solar asset management (SolarAM):
- SolarAM – Addresses the “financial, commercial and administrative activities necessary to ensure the plant’s energy production translates into the appropriate revenue stream,” writes Wiseman.
- O&M – Often considered a subset of AM, O&M ensures that power plants produce optimal energy and are maintained well.
In her second piece, 5 Factors Shaping the Solar O&M Market in the U.S. and Europe, Wiseman shares some takeaways from a discussion between SoliChamba’s Cedric Brehaut, Skytron energy’s Christoph Neufink and Alectris’s Vassilis Papaeconomou on the differences between the O&M markets in the United States and Europe. For example:
- The value of solar “energy” is lower in the United States. Europe promotes solar with feed-in tariffs that are production-based incentives, unlike the U.S. investment tax credits (ITC) which encourage higher upfront costs rather than more productive power plants
- The mindset toward O&M differs in the U.S. vs. Europe as Christoph Neufink shares how Europe’s approach is more proactive vs. more cost effective reactionary tactics used in the U.S.
Finally, in 5 Considerations Shaping U.S. Residential and Commercial Solar O&M, Wiseman speaks with Clean Power Finance’s (CPF) Greg Sellers and RadianGEN’s Joe Kastner to better understand solar O&M from the experts’ residential and commercial perspectives, respectively.
HERE’S A LOOK AT SOME OF THE KEY TAKEAWAYS:
- The primary difference between residential and commercial solar O&M is the preventative maintenance strategy, which is typically stronger for commercial projects.
- Sellers says that the main challenge for residential O&M activities is system installation, while Kastner says that the main challenge for commercial O&M activities is overcoming the low O&M budgeting that occurs when optimizing projects around the Federal Investment Tax Credit (ITC).
- The primary factors in budgeting O&M activities for residential solar are component replacement costs. For commercial solar, Kastner says the primary factors are project revenue, size, location, proximity to other projects, design and equipment.
- CPF measures ROI by keeping overall performance of projects above expectations and minimizing service calls. RadianGEN looks at the stable internal rate of return (IRR) owners can achieve by incorporating preventative strategies.