The total addressable market for solar PV operations and maintenance (O&M) is expected to reach 30 GW in 2018-19. It is likely to more than triple by 2022 to exceed 100 GW. This presents a significant business opportunity. At Renewable Watch’s conference on “O&M for Solar Projects”, industry representatives highlighted the key issues and challenges in this space, discussed the role of digitalisation and automation, and spoke about the most promising technologies and business models.
Dr Andre Nobre
Cleantech has been growing at a tremendous pace, at over 100 per cent a year. So, the amount of work is enormous and we are not just positioned in India but also in the rest of Asia. Of our current portfolio, about 20 per cent of assets are overseas, spread across countries such as Singapore, Malaysia, Vietnam, Thailand and the Philippines. We are also expanding to Indonesia. But India is our bread and butter, and our project pipeline here is about double of what we have installed today. We have about 200 MW of capacity in the pipeline, most of which is already contracted. A major part of this is through open access. We are now beginning to set up ground-mounted systems as well.
The first year of operations was very bad in the sense that we inherited a lot of damaged PV systems and Cleantech did not have a technical team. Today, we have about 50 engineers. In the first year, the keywords were – assess the damage and stop the bleeding. So, a lot of the assets used to perform at 10 per cent or -15 per cent in accordance with the business plan. In the second year, things improved and we entered the single-digit loss zone. So, the keywords for the year were – fix and continue to hire, and give feedback to the engineers in the upstream design EPC team. That brings us to year three where the keywords have changed to stabilisation. The assets were not bleeding but started showing positive returns. So, the idea was to keep them that way while continuing to give feedback to all the departments.
Having said that, I must mention that people in the solar industry are just portraying a rosy image of the situation when actually, it is not that easy a space to operate in. For developers, outsourcing project O&M is crucial to focus on their core business. When outsourcing O&M for these projects, we focus on various aspects. One is if the company can provide safe services, because the investors don’t want to have their names in the press in relation to an accident at a solar site. Another aspect is the technical capability of an O&M player.
The third aspect is price. It is not the most important aspect but it is a key one. The price of O&M needs to come down and the way to do this is through bundling and partnerships. I must mention here that system costs are already dropping.
We have outsourced 40 per cent of our portfolio to Avi Solar for O&M and it is doing a good job. In the beginning, we had about 15 partners all over India. Over the years, we stopped working with five of them as they did not meet the company’s philosophy. In some cases, our safety team rejected their credentials. Now we have about 10 O&M contractors and I think the number will drop further, may be to six or seven, not because of the price but because of service delivery.
Avi Solar Energy Private Limited was established in 2010. Since 2014, we have been aggressively working in the solar O&M space. Currently, we are handling a portfolio of 600 MW of ground-mounted projects and more than 70 MW of rooftop solar projects. We are operating on ground-mounted solar power systems in seven states and on rooftop-scale solar projects across 35 cities.
Apart from O&M, we provide SCADA services. Based on our past experience, we always say that there should be transparency between the O&M team and the EPC provider or developer. If this is not maintained, it means there will be some deviation between the expectations and the deliverables.
We have set up various hubs or clusters for the rooftop-scale project so that we can have a system of sharing manpower to reduce operational costs. We always try to give dedicated manpower for ground-mounted projects because they need more attention.
Of the many challenges in the solar O&M space, cost is a major challenge but quality maintenance is more crucial. Like Cleantech Solar, there are already a number of quality conscious players in the solar power space. But there are a number of other players that are only price conscious. They just want to cut down their costs and want us to deliver services at the lowest price possible. While O&M costs have come down from Rs 400,000 per MW to Rs 320,000 per MW, these players expect us to include more services within this contract and this is a major challenge that we are facing currently.
We got into the O&M business thinking there is a lot of money and it is a rosy situation. But in three years, we realised that it is a very tough space to operate in. All companies think they can do O&M. Plant owners feel they can hire an in-house team for these services. EPC providers believe that since they have built the project, they have a high level of skilled engineers with them who are in a better position to undertake the O&M. Then, there are third-party or independent O&M players like Inspire Clean Energy, which feel that they can do a much better job than the rest. So, everybody has a view on O&M, but from our hands-on experience in the past three years, it is not really that easy. For EPC players, obviously, they have installed the system and the troubles in the initial days are very few. If O&M is not done properly, over a period of 12 months, 24 months or 36 months, issues will start cropping up. That’s where industry best practices come into the picture.
Today, we are present in eight or nine states. We follow most of the best practices and want to do 100 per cent, but we don’t have the funds and the budget at this point. We have got service hubs in different parts of the country where we have skilled engineers who do the preventive maintenance and corrective maintenance jobs. Besides, there is the regular team that takes care of the routine, scheduled maintenance jobs, model cleaning or string checking.
We are not a big company doing multi-100 MW projects. We specialise and focus on about 50 MW of projects and especially on rooftop and small ground-mounted projects. Our major concern has been safety. We ensure that our customer is somebody who is equally concerned about safety. So safety for us obviously comes first and foremost. In fact, our teams across countries are clearly instructed that if they find any lapse or feel there is a safety issue, they should report it to us and stop work. Besides safety, another problem that we have faced relates to water availability. In the rooftop space, when solar projects are installed on industrial rooftops, securing entry permits and work permits itself is a challenge. We have our teams reaching the site at, let’s say 8.30 a.m., and till 9.30-10 a.m., they are not able to get an entry permit and after that, they need almost 45 minutes to get a work permit. So, it is mid-day by then, and by 4-4.30 p.m., they need to wind up their work. In between, there are at least three instances of water supply being cut. So water availability is crucial. We feel that especially in the rooftop space, it is difficult or literally impossible to do cleaning because through the day, you have dust settling on the modules. The next morning there is fog or moisture settling on those dust particles and the dust then sticks to the modules. When you attempt to do dry cleaning, there are two implications. One, you need more resources for cleaning, so then the cost of cleaning goes up. Second, the effectiveness of cleaning drops. Water, therefore, plays a very crucial role. The quality of water again is very important. Most industries don’t provide us with the right quality of water. In about 70 per cent of cases, our team gets hard water to use or recycled water, which actually affects the module. We report these to our investors, but there is very little they can do because they don’t own the industry or the factory. They don’t have their own source of water there. So these are the types of challenges we face. Safety is a challenge, water is a challenge and securing entry permits to rooftop sites and working there are challenges.
On the utility side, local issues are there, but they are still manageable. The lack of water availability at almost 50 per cent of utility projects in India is a challenge. There is huge water crisis in large-scale utility projects. Water is just not available. Robotic cleaning maybe an option because then the modules can be cleaned every night before the moisture sticks the dust on those modules the next morning. So if robots are used to clean modules in the evening, maybe it can help. But again, this would depend on the type of dust or type of soil deposition on the modules. There are some dust types that you can control by cleaning in the evening and some that you cannot do much about. For an O&M company, the other major challenge is the cost-cutting that the EPC and the investor do while executing a project, which finally, the O&M provider has to live with. Say, for example, an investor or EPC has not installed string monitoring in a large-scale project. Then, if a string is done, it becomes very difficult to identify the combiner box or, let’s say, one input of the central inverter is under-performing, or one inverter is under-performing, you start zeroing-in on which unit is under-performing. It is important to have a centralised control room and a SCADA system that can be centrally monitored. However, it would be even better to have a cloud server-based monitoring system so that all the real-time data is available on the server. It will definitely help in gathering a lot of data, analysing the data and taking preventive steps for the future.
But then, there is price pressure and we are trying to adopt new technologies to see how we can bring prices down, how we can maintain consistency of service across the country. That’s a key challenge. You could have a good team in Jaipur. The engineers there are doing a perfect maintenance job, following the entire checklist, but replicating that quality of service in, say, Mumbai or Pune may not be possible. In order to achieve consistency, we are investing in a software portal that will help us replicate and maintain uniformity in the service quality across the country. So the engineer is guided by the software app on what to do; it ensures that he performs each of the checklist steps or each or the SOP procedures. It makes it mandatory for him to record those parameters on the software as soon as the maintenance job is over or the service is over. The app immediately sends a detailed report to the asset owner or asset manager. So we are trying to bring in technologies in the digitalisation space at zero extra cost. We are trying to keep the cost implications zero or negligible for introducing these technologies. And yes, we are trying our best to improve the quality of service and maintain it consistently. Since we are in the service space, customers always expect something more and something better, so we try to keep innovating. We are learning from our experiences and that’s what we do at Inspire.