In the initial years of solar power development in India, O&M was often coupled with EPC and was undertaken by the same vendors. Of late however, solar O&M has emerged as a separate market segment with its own landscape, trends and dynamics. These trends are derived from the broader developments in the solar power segment including project sizes getting larger, tariffs going down and large capacities being tendered.
In this scenario, many project developers are focusing more on increasing their portfolio sizes and less on performance enhancement. The lack of attention given to O&M practices has become one of the primary challenges that the segment is facing, thereby leading to the need for specialised O&M players that are able to deliver more value to investors and owners.
The need for specialised O&M is also emerging due to increasing emphasis on regulatory compliance for project performance and renewable grid management. As the government becomes stricter in its implementation of the forecasting, scheduling and deviation settlement mechanism regulations, grid management will become a key component of project O&M. Developers would not like to invest in supporting technologies and would rather outsource these roles to a third-party specialising in these operations. The integration of energy storage in existing plants will also lead to greater O&M play.
Globally, there has already been a rise of third-party solar O&M service providers. As a more sophisticated and structured approach emerges in the Indian solar O&M market, a few focused O&M players have already made a foray into the solar space, some as hive-offs from existing EPC companies and others as independent specialists.
These players are not only forging tie-ups with global technology players in panel cleaning and plant monitoring, but are also undertaking in-house R&D to develop more locally suited and cost-efficient solutions. The biggest advantage is that they are able to apply best practices in projects spread across the states and owned by different types of developers, thus making the best use of cross-project experience.
According to India Infrastructure Research’s “Future of Solar O&M” report, the total addressable market for solar PV O&M is expected to reach 30 GW in 2018-19. It is likely to more than triple by 2022 to exceed 100 GW. In fact, going forward, as the installed base gets larger, O&M revenue may even exceed the development and construction revenue. Clearly, this is a large opportunity in the making in India’s fast-growing solar power segment.