Technical issues may compromise the value of an on-site photovoltaic (PV) system. Reduced output, PV outages, or electrical problems may leave a host wondering if the decision to go solar was wise.
One way to minimize this risk is to consider a Power Purchase Agreement (PPA), in which a developer owns, installs, and operates the equipment, so all such issues should be his/her responsibility. If the system goes down, the developer loses electricity sales. That is a good incentive to ensure a quality installation, and most PPA-based systems have a decent track record.
Entering into a 20-year arrangement involves trust and some risk. The previous article covers in detail some of the risks involved with PPAs, meanwhile, this article addresses the technical issues.
Before spending time and legal fees negotiating a PPA it is wise to develop a short Memorandum of Understanding (MOU) to clarify and settle any technical issues. Clarification of these technical issues may then be incorporated into the PPA, with failure to adhere seen as a breach by the developer, thus releasing the host.
A technical MOU may cover:
A professional feasibility study (done preferably by an independent third-party) is required to verify the claimed economic and energy values of a PV system. Analysis should use acceptable software and methods that optimize the location, tilt, and orientation, of the site and panels.
Will the design maximize kWh production or financial gain? The latter could alter the orientation of the panels so peak demand is reduced instead of merely making the most kWh.
How will aesthetic issues be addressed? In one case, a host realized that the PV panels would be visible atop a historic building, leading to complaints from preservationists. The panels were then placed flat on a vertical wall, rather than at the optimal tilt angle for power production. Neither the host nor the developer were happy with the resulting output, which was almost 40% below expectations.
How should the system be sized? Some say projects should be designed to produce 90% of the facility’s annual kWh, with capacity limited to the net metering limit e.g., 125% of peak facility demand, up to 2 MW. But a developer may seek to use the site to generate more power than needed in order to sell the excess in the wholesale market.
If the host decides not to proceed, how are the development costs incurred by the developer or host prior to a PPA to be compensated or shared?
To ensure quality and future serviceability, a host should have input on characteristics of critical components e.g., panels, inverters, commercial transformers including efficiency, warrantees, ratings, and brands/sources. While the developer will be expected to meet all local electric and building codes, there may be a desire to exceed them to ensure performance and durability. Those specs should then apply to any future changes to the system.
The choice of equipment may also impact performance. The type of inverter, which converts the PV’s direct current (DC) output to alternating current (AC) power, for example, may affect how much power is produced. Common in residential PV systems, micro-inverters are more expensive than the string inverters typical in commercial applications. However, unlike the string units, the micro-units may yield higher overall performance if some panels are occasionally shaded, which should be minimized as part of the system’s design. The quality of inverters may also have consequences. In a system atop a firehouse, a poor quality inverter failed, resulting in a voltage spike that “fried” some of the host’s appliances and a computer’s power supply. The installer went out of business, leaving the host to deal with the damage.
System Safety and Security
How will the system be hardened to ward off squirrels, birds, and severe weather? What measures or equipment will be taken to secure against theft?
If future problems arise, it pays to have copies of drawings (in both hard copy and electronic form, at both the site and in the host’s files) for all electrical and mechanical installations. Copies of all inspection reports and permits that were required to attain utility and city permission to start the system should be included in the documentation.
Addressing such issues before getting deep into a PPA may identify potential sources of conflict. Ironing them out early reduces future risk and helps create a win-win scenario.