The ownership landscape for non-residential solar markets has become increasingly complex amid regulatory uncertainty. Asset owners have secured access to capital and are continuing to invest in growing solar portfolios despite forecasts of slow-downs in specific solar markets. As legacy projects with favorable PPA or interconnect agreements become eligible for sale–for example, after the expiration of ITC recapture periods in the United States–solar asset owners have more options available to build their portfolios quickly. Ownership is continuing to consolidate across the top industry players, with half of U.S. installed base being managed by ten of these heavyweights. This shift has created challenges for asset owners looking to maximize returns on different groups of projects with unique design characteristics, geographic constraints and sometimes evolving commercial terms. On-site monitoring solutions are responding to this need with streamlined, reliable data for a clear lens into financial performance across sites.
The PV performance path
The monitoring and control systems installed on most solar projects have long been asset owners’ prime tools to identify operating problems and maximize system output from each installation. As incentive rate structures and energy storage deployments gain more prevalence in the market, asset owners have more choices than ever before for unlocking new value streams. To complicate planning, influential factors like PPA rates and peak demand fees are subject to change with the market, so any cost-benefit analysis needs to be dynamic.
Analyzing accurate performance data against estimates of expected system output is a real-time avenue for navigating the complex landscape of revenue optimization. With both interest rates and investment risk at a low, many non-utility asset owners in the U.S. are applying more highly-leveraged capital structures to maximize investment returns. This dynamic raises the stakes when it comes to operational missteps and amplifies the importance of transparent, accurate production and financial information.
For the unique challenges of consolidated portfolios, asset owners need to implement processes that minimize O&M costs across sites and ensure that projects are performing consistently despite their unique traits. As a first step, updating the monitoring and control systems provides a consistent baseline to inform internal protocols that minimize system downtime. Many of the monitoring technologies installed on older generation sites lack the functionality required to get the most out of site performance in the evolving world of portfolio growth. These sites are driving a wave of monitoring system retrofits, focusing asset owners on the strategic benefits of consolidating monitoring, control and reporting into one or a small group of solution providers. Asset owners can “future-proof” their assets by investing in enhanced control capabilities ranging from remote on/off options for reclosers and inverters to more complex functions like managing the quantity and characteristics of power delivered to the grid base.
Monitoring and control in the age of data
Historically, the market for monitoring solutions was dominated by vendors offering integrated data acquisition and software systems. These traditional providers have been slow to move beyond operational reporting functions. Software-as-a-service (“SAAS”)-only vendors have emerged and grown rapidly to fulfill the advancing needs for business intelligence, reporting and analytics for asset owners. Hardware-agnostic monitoring platforms are gaining a foothold but still generally require a data feed from the installed data acquisition or SCADA systems in order to operate. Many software-only vendors are not equipped to resolve hardware issues or make necessary upgrades to the systems that are installed on-site. Frustrations can mount for asset owners as they layer on yet another vendor, requiring cooperation between suppliers to get the aggregated information they need to effectively manage their portfolios.
As a result, developers may opt for integrated data acquisition and control solution providers who have invested big-data software and analytics that complement their expertise in managing PV assets. GTM Research and Solichamba predict that the industry’s top monitoring players will continue to rely on the traditional business model of deploying both hardware and software through at least 2022.
Financial modeling: recording ROI
As portfolios continue to consolidate, asset owners are seeking monitoring solutions that focus on financial management and asset record keeping to accurately understand site performance. Financial models are generally built on the operational data gathered from the site, but new financial management functions can rely on a much smaller (and more often more uniform) data set to simplify the process of getting an entire portfolio’s data into a single system.
Through robust record-keeping, asset owners can increase and secure future site value by creating a unified ledger of activity and performance. Employing centralized, transparent data tools can streamline compliance histories across portfolios and assure a more attractive investment when the asset is ready to sell.
Practicalities & pitfalls of portfolio consolidation
While portfolios continue to grow, thorny issues tend to become compounded for asset owners when sites are acquired from multiple vendors that have diverse monitoring systems already installed. Monitoring and control technologies designed by leading providers often handle the recording and processing of data points differently. In a transition, this can produce inconsistent data resolution if not initially anticipated in a consolidation work plan. The reconciliation of differences in reported data can be time consuming and expensive, extending implementation schedules for asset owners, especially when a single site produces hundreds or thousands of data points. If historical data is not ingested and stored by the new monitoring solution provider and correctly processed, important trend analysis may have holes and discontinuities that detract from its worth.
Communications arrangements and protocols vary among monitoring and control system providers. If the communication of data is not transitioned effectively, there can be interruptions in data transmission or worse – data losses for asset owners. The management of the monitoring and control system consolidation process is critical and needs to be closely coordinated between the monitoring solutions provider and the customer. Successful portfolio consolidation requires a cross-functional sensitivity to the applications of the information and uses of the monitoring platform, which can inform purchasing decisions. To maximize future portfolio value, the data aggregation and reporting element needs to be an important piece of the ownership equation.