Solar’s demographics are changing

Utilities will account for more of the PV pie, and they will be looking more closely than ever at long-term system reliability.

Small solar PV systems have enjoyed boom times in recent years, but despite a continuing trend toward more PV, less of the installations slated for completion over the next four years will be of the residential/commercial variety. According to a new GTM Research report sponsored by ABB, utility-scale solar projects will make up 55% of the total by 2017, up from just 37% in 2011.

The shift is at least partly explained by the stabilization of PV panel prices on one hand and the shrinking support for subsidies on the other. After declining nearly 70% in just four years, PV panel prices are now expected to flatten out as rationality returns to the market. Meanwhile, government support for solar is waning. While the lack of subsidies might constrain residential solar, the outlook for utility-scale solar is still good (utilities still have to meet renewable portfolio standards), but more scrutiny will be applied to long-term cost of ownership.

That implies a focus on maintenance practices, and rightly so. According to GTM Research, maintenance contracts for large-scale PV sites range anywhere from $10,000 to $30,000 annually per MW of installed capacity. However, there are other factors that can impact long-term costs.

Mistakes in system design or installation, for example, often take years to surface but in the meantime can bleed a project of vital revenue and/or cause the untimely demise of various components. Obviously, design and installation fall under first costs (cap ex), but the impact of mistakes in either of these areas will be paid for out of the O&M budget.

Going forward, a renewed emphasis on availability and reliability over the long term is likely to drive interest in advanced maintenance regimes but also should highlight the importance of getting the system design and installation right in the first place.