Solar PV O&M - Market & Evolving Trends

Solar O&M Market & Evolving Trends

An insight into opportunities, progress and trends across solar PV O&M market in India...

O&M project outsourcing is critical for developers and plant owners so as to focus on their core business activities. While handling out a solar power plant under an O&M contract, the aspirations of the owners are for maximisation of generation output and plant life sustainability – as a typical Solar PV plant has life of over 20 years.

In addition, the plant’s O&M has become even more important for ensuring overall productivity for the plant and can have significant effects on the project IRRs with lowering tariffs in India.

Thus, the O&M service provider is largely responsible for the operation and maintenance of the solar power plant ensuring efficient and quality production levels throughout service cycle for the satisfaction of the customer

Market & Trends

In recent years, the solar power industry in India has grown significantly. While the plant sizes are increasing, the developers are expecting improved performance levels that has opened up new market opportunities for Solar plant operation and maintenance service providers.

The major trends that are shaping the solar O&M market in India include the number of factors. First of all, we are witnessing increased scale and density of solar plants in India backed by continued and strong market growth.

Increased scale and density helps the vendors because the more plants you have in a given territory, the more efficient you can become in serving these plants and the more you can optimize your costs.

Further, over the years the sector has witnesses an increase in awareness and focus on these topics of O&M and asset management from the investors, from the developers and from EPCs as well.

This increased recognition and focus from these key stakeholders has been playing a key role in shaping the Solar O&M and asset management market in India.

In addition, now with more plants exiting their initial warranty period - the O&M market in India is opening up for fresh O&M contracts. Typically the O&M contracts are tied to a period that usually matches with the initial warranties.

At the expiry of the warranties period, the holder is left with an option to either choose to extend the contract with the original supplying provider (often by the EPC or the Developer) or to move to a thirdparty service provider.

Evolution of Independent Players

It is important for industries to rely on the expertise of solar PV O&M companies for the need for daily and optimum solar panel management. Though, many a time companies and plant owners engaged in solar PV projects believe they can perform O&M activities through an available in-house team.

On the other hand, solar PV EPC providers believe that they are in a better position to carry out O&M activities, since they have built the project and are also

equipped with qualified engineers. This allows the customer to hold the EPC’s feet ‘to the fire’ and also our ‘feet to the fire’ because, we commissioned the plant. If we come back and say, well, this plant wasn’t built right, we don’t have such excuses. We have to say this plant is according to what was designed and so we can provide those performance vice business for solar O&M. This could include installation firms, developers, manufacturers or other service providers now doing O&M. Such solar power maintenance companies are trained to keep the PV system up and take corrective action whatever is required. They are in position to do a much better job than the rest being equipped with engineers who have received extensive solar operation and maintenance training. With years of field training to their credit, they perform automatic as well as efficient system checks to ensure that solar power plants are evaluated in line with international standards. Increased scale and density of solar plants in India backed by owners expectations for improved performance levels in solar plants is responsible for shaping the solar O&M market in India. Thereby opening up new market opportunities for solar plant operation and maintenance service providers. ....

In the fast moving solar PV operations and maintenance (O&M) market, independent service providers or ISPs who were once marginal players’ are now capturing significant levels of market share related to O&M and asset management services.

These are organizations active in the solar market that have created a ser

Their consistent monitoring and inspections guarantee instant actions when production drops. Overall, O&M teams take care of all the aspects of maintaining a solar power plant thus ensuring that there are no glitches in the smooth functioning and power supply to their clients.

So this is really a clear opportunity and it is going to increase because as the number of new plants has been increasing these last few years, you take that same growth curve and you shift it by two to five years, depending on the length of the warranty, and then you have warranty exits that follow that same growth curve.

Thus, these factors are definitely positive for independent vendors in particular.

Making Choice:

The first value is choice because the developer and plant owners usually wouldn’t even look to an alternative provider to the EPC.

This is typically because they know the plant well because they designed and built it. It is also an advantage for owners as an EPC cannot shift the blame to someone else, particularly when it comes to warranties.

But at the same time, ISPs and ASPs are increasingly competitive in those situations, especially when there’s an RFP process with competitive bids.

Here the investors and owners now have more choice from increased competition, meaning that providers are going to fight to offer the best deal.

To Sum - Delivering value is the key

There’s an increased requirement of higher performance guarantee and plant availability numbers.

This coupled with reducing price expectations, is making the market highly competitive to operate in.

Survival in the market can only be ensured through best in class service offerings, aligned with customer expectations, at competitive pricing.

Moving forward, as a more sophisticated and structured approach emerges in the solar O&M market, third party providers will able to deliver more value to solar investors and owners.

The key to all of this is to be able to provide performance guarantees. n

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www.powerinsight.vision-media.co.in | Power Insight | October - November 2019 | www.juwi.com · www.juwi.in Contact Details: All India: East & North: West: South: Ashish Vyas +91.8003696036 Chandrakant +91.9111013816 Nilesh +91.9662517814 Deepak +91.9611886084