Are we there yet?: AMP Conference captures growth spurt in utility solar asset management

You’re an asset manager of utility-scale solar power plants, and your CEO has just made you responsible for your company’s most recent acquisition, a 10-megawatt project, soon to begin construction. The new plant comes with some heavy expectations around financial performance, which, based on the construction contract and engineering specifications you receive, it’s probably not going to meet.

The first thing you do is . . .

At the recent Solar Power Asset Management and Performance (AMP) conference in San Diego, the recommended first step was sitting down with a table of industry experts — each with different areas of expertise — to brainstorm solutions to this hypothetical problem. The conference was sponsored by the Smart Electric Power Alliance (SEPA) and the Solar Energy Industries Association (SEIA), and the asset management scenario above was part of an innovative Business Institute, a very hands-on, three-hour session that concluded the event.

With the recent, furious growth of solar — more than 10 gigawatts of utility-scale projects came online in 2016, according to GTM Research — asset management, and operations and maintenance (O&M) have become critical to solar’s present and future as a mainstream power source. Across the country, thousands of systems are now producing power, with the expectation that they will all have a robust and profitable life cycle of two decades or longer.

However, not all solar assets are designed and managed with that long-term operational timeline in mind. Due to different investment priorities, some projects can afford a higher upfront cost — potentially leading to more durable designs with ultra high-quality equipment and construction. Others may be built for shorter payback terms, with more immediate gains that may lead to the likelihood of a less productive lifespan. Further, if a developer intends to sell a project after a year or two of operation, long-term asset management plans may not figure into the system design.

The emerging consensus in the industry is that asset management and O&M have to be integrated — operationally and financially — on the front end of a project, rather than added on as an afterthought.

Designing for long-term performance

Scheduling the institute at the end of a two-day conference — on a Friday afternoon that just happened to be Inauguration Day — was a calculated risk for the AMP conference organizers. But the 40 attendees who turned out for the session remained focused and engaged throughout, with little of the usual late-afternoon attrition one often sees at such industry events.

“What we hoped would happen — and did — was that workshop participants really got into the scenarios,” said Daisy Chung, a research manager at SEPA who leads the nonprofit’s Asset Management and O&M working groups. “They were able to work across traditional silos in asset management; and to do that, they had to wear different hats and see things from different perspectives than they might in their jobs.”

Why a more collaborative approach is so important, Chung said, is that the company that builds a solar plant is often not the same as the company that signed the original contract with the offtaker — the organization ultimately using the power the system generates. Ownership may change hands under a variety of scenarios, and developers are driven to bid their projects at ever-lower, more competitive contract prices.

Check out SEPA’s Asset Management and Operations and Maintenance Resource Guide here.

Asset management and O&M may seem likely places to trim costs — or just suffer from the miscommunication that can occur among different players — until performance issues or other problems arise during construction or once a plant is in operation, Chung said.

The need to design systems for predictable, consistent, long-term performance — that is, to integrate asset management perspectives from the very beginning of project development — was a key message stressed repeatedly throughout the conference. What such a proactive approach might mean was reflected in the range of topics covered in conference workshops, everything from vegetation management, to risk assessment and financing, to the pressing need for standards development.

“It is not about building something, or taking something that is already running and managing that,” said Chung. “Asset management begins the moment you start envisioning the project, from the ground up. Of course, the role and responsibilities of the asset manager change as a project matures, but in order to fully manage a project, you have to start at the beginning.”

Translating that imperative into real-life terms was the impetus for the organizers’ decision to focus the Business Institute on a basic asset management scenario — project development and delivery. But the six groups of attendees working on the problem also had to contend with slightly different design or operational challenges.

Participants had to make tough choices about specific details, such as system monitoring, string versus centralized inverters, and changing performance guarantees after component orders had been placed and construction started. They were also often working with incomplete information and potential friction between project stakeholders —  both implicit real-life difficulties woven into the workshop scenarios.

Peter Lum, Senior Learning and Development Professional at Enphase Energy, who facilitated the workshop, encouraged people to focus less on finding a “right” answer and more on exploring and leveraging the collaborative process.  The result — significant, if a bit expected — was that even when groups had identical scenarios, each came up with a different strategy and solution.

For example, George Zviagin, Founder and CEO of Ra Power Management, said his group had to consider the costs and benefits of at least two different options in how to hit the project’s performance goals.

“But in the end, two data points had such an impact on the economic outcome that (we felt)  confident in saying that nothing else mattered,” he said.

Others, finding that the economics outlined in the scenario were less conclusive, based their recommendations on different factors entirely, such as improving relationships with existing vendors as a key strategy for better communication and documentation.

Well out of Model T stage

Speaking at the conference, John Balfour, President and Chief Technology and Applications Officer at High Performance PV, compared the ongoing development of utility-scale solar asset management and O&M to the historic evolution of automotive technology. Using system monitoring as an example, he said, the earliest cars — such as Ford’s Model T — had relatively little technology to maintain; the voltage meter was it.

But as cars have evolved, the technology, and the time and expense for regular maintenance have become increasingly complex. Cars today are equipped with numerous gauges to meter a variety of performance indicators, and the projected cost of maintenance has become a routine consideration for consumers making a decision to buy a car.

Solar is well out of the Model T stage, Balfour said, but not yet as refined as a top-line electric vehicle.

As is increasingly the case in many aspects of the solar industry, the solutions going forward will be developed by cross-silo, open collaboration — and reflect the innovations that working together can generate.

For more information on SEPA’s Asset Management and O&M Working Group and future publications, contact Daisy Chung at [email protected], or visit the working group web page here.