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Technical Risks in Solar PV Projects 18.03.18

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The technical risks in solar PV projects are arising mainly in modules, inverters, other equipment. These risks are unpredictable and can be occurred in any phases of life cycle of PV project like development, installation, commissioning and operation leading to plant outage or reduction in energy output. The presentation covers the various risks and associated mitigation measures.

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Technical Risks in Solar PV Projects 18.03.18

  1. 1. GENSOL CONSULTANTS PVT. LTD www.gensol.in Technical Risks & Mitigation Measures in Solar Rooftop Projects
  2. 2. Content of Presentation Gensol Group • Lenders Independent Engineer (LIE) Services • Gensol’s LIE Credentials • Market Scenario of Rooftop Projects • Technical Risks in Solar PV Rooftop Projects • Risk Transfer & Mitigation Measures Presentation Covers….
  3. 3. LIE Scope of Services – Ground/Rooftop Solar PV Project Gensol Group  Site Visit and Site Assessment  Plant Design Requirements  PPA Conditions Review  Solar Resource Assessment  Energy Yield Estimation  Technology Assessment  Technical Inputs to Project Financial Model  Review Project EPC Contract for completeness and reasonability  Review of Permits and Licenses, etc. The scope of work for providing Lender’s Independent Engineering (LIE) Services is divided into the phases as follows: Independent Technical Assessment Pre-Disbursement Inspection Performance Assessment Tests Post Commissioning Inspection  Review of construction progress of each activity of the project  Monitoring critical project activities  Comments on quality of deployed work  Estimate handover of the project in line with timelines  Review of Operation and Maintenance Contract  Review of O&M manuals & comment on completeness  Review of monthly plant performance  PR test methodology and PR guarantee  Facility Acceptance Test (FAT) and its compliance with guaranteed parameters  Review of test reports of various equipments  Performance analysis (CUF & PR) at site conditions  Comparison of solar radiation with historical data  Review of Operation & Maintenance Schedule  O&M Budget & Contract Review  Verification of physical healthiness of the plant  Verification of adequacy of spares available at the site  Review of monthly performance of the plant  Performance analysis of the plant at site conditions on the basis of CUF & PR
  4. 4. Lender’s Independent Engineers (LIE) Projects Credentials Gensol Group 2,030 MW Portfolio 16 Lead Lenders 43 Lead Developers 14 States 80 Projects 45 Successful Projects 35 Running Projects More upcoming projects 779 266 185 175 122 190 100 75 40 32 20 15 15 8 8 0 5 10 15 20 25 30 35 0 100 200 300 400 500 600 700 800 900 PFC,PFC-GEL,PTC IDBIBankLtd. CentralBankofIndia StateBankofIndia L&TInfrastructure Finance IndusInd BankofIndia AxisBank UnionBankofIndia EXIMBankLtd. StateBankofPatiala YESBank TATACleantechCapital Ltd. RelianceCapital IREDA LIE Portfolio with Lead Lenders Capacity (MW) No. of Projects
  5. 5. Status on Lender’s Independent Engineers (LIE) Projects Gensol Group ACME Suzlon Essel Solar Pack Azure Jackson Solar 430 240 225 212 180 174 170 124 95 71 50 30 19 10 Telangana Karnataka Gujarat Andhra Pradesh Madhya Pradesh Maharashtra Punjab TamilNadu Rajasthan Uttar Pradesh Bihar Chattishgarh NewDelhi Odisha LIE Projects – State wise Portfolio 374 370 170 85 80 70 63 60 45 30 13 670 Welspun ACME Photon Essel Solar Pack & Think Energy Suzlon Azure Sun Edison First Solar Solaire Direct Jackson Others LIE Project Portfolio with Lead Developers
  6. 6. Rooftop Overview (2017) Focus to Indian Scenario Gensol Group India’s total installed solar capacity is estimated to have reached 17.80 GW as on September 30, 2017. This includes 15.94 MW of utility scale (90%) and 1.86 GW of rooftop solar capacity (10%). The states of Tamil Nadu, Maharashtra and Rajasthan are the top states accounting to highest RT solar installation in the country. Amongst the consumer segments, Commercial and Industrial consumers are the key segments driving the growth of rooftop solar in India. Jawaharlal Nehru National Solar Mission Atal Innovation Mission Make in India Smart Cities Mission 24X7 Power for all Ujjawal DISCOM Assurance Yojana Supportive GoI Missions & Initiatives for DG 11% 21% 8% 10% 50% Rooftop Installation –Sept’17 commercial industrial public sector residential Total Rooftop Scenario –India, Bride to India, Dec 2017
  7. 7. State Attractiveness for Rooftop Projects Gensol Group All States in India - 30 Well Defined Solar Policy - 21 Net Metering Policy - 20 DNI>5 15 Prioritization Criteria TariffAttractiveness Net tariff differential between the existing variable tariff for that sub- segment and potential solar tariff in year 1 in that state for a 15% IRR OpportunityPotential Rooftop solar market opportunity size (MW) Current penetration (as a % of potential) PolicySupport Specific elements of state solar policy that are beneficial to a developer: - Subsidies & incentives - Strength of intent Parameters to assess prioritized States
  8. 8. State-Wise Segment Estimated Potential Gensol Group Rooftop Potential (MW) State Commercial Industrial Residential Total Maharashtra 568 1614 5589 7771 Rajasthan 378 433 2282 3093 Tamil Nadu 1220 1192 5495 7907 Delhi 185 145 2869 3199 Uttar Pradesh 480 643 6090 7213 Punjab 369 522 2115 3006 Karnataka 854 418 2756 4028 Andhra Pradesh 362 472 2518 3352 Haryana 434 439 1625 2498 Kerala 326 186 2163 2675 Telangana 327 426 2269 3022 Gujarat 197 999 2527 3723 Madhya Pradesh 299 358 2154 2811 Chhattisgarh 165 255 920 1340 Uttarakhand 136 161 437 734 Total 6300 8263 41809 56372 0 1000 2000 3000 4000 5000 Lakshadweep Arunachal Pradesh Meghalaya Nagaland Tripura Puducherry Goa Assam Uttarakhand Chhattisgarh Kerala Odisha Haryana Punjab West Bengal Karnataka Gujarat Uttar Pradesh Year Wise NSM Rooftop Target for all States 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
  9. 9. Rooftop Solar PV Sector –Prime Focus of Investors Gensol Group The Solar PV sector has experienced a significant growth in past few years making it one of the biggest investment destinations. Therefore, quality assurance plays a crucial role in achieving a robust photovoltaic (PV) market by maximising returns to the investors through prudent management of risks at all stages of project implementation. Solar Bankability Assessment from Different Stakeholders’ Perspectives To evaluate the impact and probability of investment risks of PV Rooftop projects and Ground mounted as well.
  10. 10. Risks in Solar PV Investments Gensol Group Impact of Risks in RE Energy Investment and Role of Smart Policies , Fraunhofer, 2016 Solar PV Risk Technical Administ rative Market design Policy & Regulator y Financing Social acceptan ce Policy change
  11. 11. Technical Risks in PV Project – Rooftop & Ground based Gensol Group Technical risks are those that arise from the PV module, inverters, and other mechanical and electrical components, as well as system engineering, energy prediction, installation and operation. Some risks are confined to specific phases of development, such as construction risk, while others persist throughout the entire cycle from planning through operation, such as default risk. Hence, this needs to be timely and effectively managed. Influence the PV system performance and energy yield Those which cause failures effecting plant availability and outages • Their root cause falls in the project development phase during component production/testing and PV system design, planning, transportation and installation phase prior to commissioning Pre-Commissioning or Year 0 Risks • Their root cause falls in the project operational phase after commissioning and before decommissioning. Post Commissioning or Operational Risks
  12. 12. Factors Leading to Risks in Solar PV Rooftop Projects Gensol Group Technical Risk: Unpredicted System Failure Uncertainty during yield estimation Calibration of PV module flasher Irradiance estimates Loss factor Module degradation Assumptions in LCOE Geographic/Site Conditions PV System Design System sizing Technology selection
  13. 13. Technical Risks Matrix – Solar PV Projects Gensol Group
  14. 14. Technical Risks in PV Project – Operation Phase Gensol Group The occurrence of risks during the operation phase follows the bathtub shaped curve. Fraunhofers Photovoltaic Durability Initiative Reducing Investment Risks, 2013 Defects in PV Solar modules, Mike Rycroft(EE Publishers), 2016
  15. 15. Top Risks in Major Equipments Gensol Group Modules Inverter PV Investment Technical Rsik Management, Solar Bankability, 2017
  16. 16. Technical Risks in Modules Gensol Group Product Testing/ Development •Failed Insulation Test •Incorrect Cell Soldering •Incorrect adhesion of Junction Box •Arcing in PV Module •Visually detectable hotspots •Cell mismatch & overlap •Potential Induced Degradation •Lack of manufacturer’s experience in the field •Incorrect assessment of module degradation PV Plant Planning/ Development •Soiling losses •Mutual shadow of modules •Modules mismatch loss •Specific climatic conditions not considered •Unclear simulation parameters Transportation/ Installation •Module mishandling – Glass/ cell breakage •Defective back sheet •Bad wiring without fasteners •Module frame damage •Breakage during transportation & installation Operation & Maintenance •Hotspot •Delamination •Module Degradation •Snail track (Discoloration Effect) •Theft or vandalism of modules •Spare PV Module unavailable Decommissioning •No product recycling procedure defined or implemented •Higher costs of different module technology •Capacity to recycle module
  17. 17. Some Examples of Technical Risks in Modules Gensol Group Chipped solar cells (Lower Grade of cells) Scratches on the module (Negligent and unsafe packing.) Solar Cell String Alignment (Manufacturers Negligence) Snail Trails Poor Quality of cells Breakage of Glass due to Installation Breakage of strips Uncleaned Modules
  18. 18. Technical Risks in Inverters Gensol Group Product Testing/ Development •Maximum Power Point Tracker (MPPT) issues •Master/Slave Operation issue •Manufacturer’s Insolvency •Low production quality – Serial defect •Lack of manufacturer’s experience in the field PV Plant Planning/ Development •Wrong sizing of inverter •No protection against overvoltage •IP number not complying with installation conditions •Inverter cabinet not sufficiently ventilated •Inverter exposed to direct Sunlight •Maximum voltage limit exceeded by open circuit voltage of PV array Transportation/ Installation •Inverter configuration •Missing contact protection •Missing surge protection •Inappropriate installation •Missing dummy plug Operation & Maintenance •Fan failure & Overheating •Switch failure/damage •Inverter theft or vandalism •Fault due to grounding issues •DC entry fuse failure causing PV array disconnection •Inverter damage due to lightning strike •Auxiliaries power charger failure •Inundation damage Decommissioning •Inverter size and weight
  19. 19. Technical Risks in MMS Gensol Group Product Testing/ Development •Mounting structure corrosion •Galvanization is too low •Lack of structural expertise PV Plant Planning/ Development •Weak anchorage •Roof and static analysis missing •Incorrect dimensioning of cantilever •Ground and static analysis missing •Sun shading angle •No or incorrect structural expertise •Safety measures on roofs •Landscape/ Portrait installation Transportation/ Installation •Small module distance •MMS does not comply with static calculations •Damaged support pillar •Cover over the purlin is misaligned •Low bearing surface •Frame bars not deburred •Module clamp not fixed correctly Operation & Maintenance •Damage due to excessive wind/ slow loads •Earthquake damage •Damage during maintenance work •Corrosion Decommissioning •Damage on the roof/land •Rotten structure difficult to recycle
  20. 20. Technical Risks in Distribution Boxes Gensol Group Product Testing/ Development • Cracking or rusted housing cover • Material incompatibility • Contact resistances at connecting points • Diode selection/ Thermal stress • Missing safety hint • Protection class labeling is missing PV Plant Planning/ Development • Wrongly sized cable gland • Wrong series fuses • Climatic valve is missing or incorrect installed • Missing fault- current circuit breaker • No weather protection • Bad selection of DC fuse Transportation/ Installation • Cable gland missing or incorrect installation • Missing and incorrect installation instructions and safety information • Incorrect treatment of aluminium cables • Lack od strain relief Operation & Maintenance • IPS off • Missing protection • Wrong wiring • Wrong automatic recloser • IPS not in compliance with laws Decommissioning • Rotten structure difficult to recycle
  21. 21. Technical Risks in Cables Gensol Group Product Testing/ Development • Broken Connector • Corrosion in connector PV Plant Planning/ Development • Cable undersized • UV protection cable • Deviation/ insufficient cable cross-section Transportation/ Installation • Loose string cable • Improper cabling • Missing edge protection • Improper insulation • Cable conduit not closed • Cable not protected against mechanical damage • Missing cable lugs • Proper cable spacing in conduits Operation & Maintenance • UV aging • Theft of cables • Broken cable ties • Cables damaged by rodents • Wrong connection/ isolation or setting of strings Decommissioning • Price of copper
  22. 22. Technical Risks in Earthing & Lightning Protection System Gensol Group Product Testing/ Development • Nil PV Plant Planning/ Development • No grounding system installed • Inappropriate grounding system • Incorrect surge concept Transportation/ Installation • Missing or incorrect fixed potential equalization • Corrosion at unprotected grounding connections • Overvoltage arrester not connected to the ground Operation & Maintenance • Wrong setting of anti-electrical and mag-thermic switches • Broken fuses • Broken contactor • Too high grounding value • Overvoltage arrester not connected to the ground Decommissioning • Nil
  23. 23. Technical Risks in WMS & Communication & Monitoring Gensol Group Product Testing/ Development •Nil PV Plant Planning/ Development •No monitoring system installed •Shadow & Soiling of irradiance sensors •Inadequate data logger •Different orientation between solar irradiation sensor and PV array •Disturbance on data communication •Temperature sensor not protected from direct sunlight Transportation/ Installation •Misalignment between solar irradiation sensor and PV array •Erroneous data or missing information implemented in the monitoring system •Inadequate communication cables •Incompatibility in WMS and communication cable. Operation & Maintenance •Damaged sensor •Monitoring system failure •Shadow & Soiling of irradiance sensors •Data logger power charger failure •Network monitoring relays malfunction indicator light Decommissioning •Nil
  24. 24. Some Examples of Technical Risks During, Pre & Post Installation Gensol Group Improper Connection SC leading to bursting of cables transmission lines run overhead Burnt Panels due to small size of cables Large machinery requirements just for material to reach plant location Installation on roofs with life lines Installations at roof corners Earthing works from roof to ground
  25. 25. Technical Risk Assessment & Mitigation Measures Gensol Group From the past experience from consultancy services, data from historical due diligences, operation and maintenance records, and damage and claim reports, the most effective mitigation measure is the prevention of technical risks followed by the detection of technical risks in order to avoid material defects, performance losses and potential personal hazards. Site Assessment EPC/Sub Contractor Assessment System Design Assessment Energy Yield Evaluation Project Cost & Financial Assumptions Bank Guarantees/Wa rranties O&M Schedule /Contract Risk Assessment & Mitigation Measures Corrective Preventive
  26. 26. Mitigation of Technical Risks -1 Gensol Group Risks Probability of Occurrence Magnitude of Impact Possible Mitigation Measures Technology Risk Low Low  Procurement of equipment as per quality standards and specifications notified by MNRE (Technical Due Diligence). Solar Resource Data Risk Low Low  Verification of performance projections with multiple solar resource data sources, including site-specific resource data, if available (Technical Due Diligence). Power Off-taker Risk Medium High  Careful screening of power off-taker credit history. Policy & Regulatory Uncertainty Low Low  Low reliance on policy and regulatory incentives for project viability. Developer/ Promoter Risk Low Medium  Careful screening of project developer / promoter experience.  Evaluation of proposed project (Feasibility Report, Independent Consultant). Theft & Vandalism Low Low  Debt servicing condition in terms of loan agreement in the event of theft or vandalism. Low Credit Profile of Borrowers Medium Low  Expand KYC database in commercial and industrial sectors . Security Coverage Low Medium  Determining alternate means of security.
  27. 27. Technical Mitigation Measures -2 Gensol Group Mitigation Measures Description –During Planning & Operation Phase Reducing uncertainty (irradiance, temp, degradation)  Reducing these uncertainties can help to make the investment of the PV system more attractive Qualification of EPC  EPC personnel shall have a high educational level as well as appropriate technical knowledge Design Review & Construction Monitoring  To ensure the adequate designing and construction as per the IEC standards and Grid codes. Component Testing  Components must be able to withstand, while withstanding an extremely wide range of environmental conditions ensuring safety, durability the system’s high yield over the long- term period Basic Monitoring System  The monitoring on plant level including device alarm collection, aggregation functionality on plant level for energy, irradiation and performance ratio are typically provided Visual Inspection  any visual changes are occurring that may affect the performance of the principal components or reduce the effective life of the system Advance Inspection  the use of techniques which go beyond visual inspection such as infrared imaging (IR) and electroluminescence imaging (EL), IV string analyser, etc. Spare Parts Management  Ensures the availability of the right amount and type of components, equipment, parts, etc. either on site or in warehouses or in manufacturers’ consignment stocks, for prompt replacement in case of failure
  28. 28. Criteria for EPC Contractor Selection Gensol Group EPC Contractor assessment of all the contracting parties is essential to ensure that PV project will be backed by high quality components ,professional workmanship and recoverable guarantees and warranties.
  29. 29. Criteria for PV System Skill/Trade Gensol Group For Rooftop PV systems, the qualification should include electrical, mechanical, structural and roofing know-how and expertise. The design, installation and operation of residential PV systems require specific skills from different trades.
  30. 30. Technical Risk Transfer in Solar Rooftop & Ground Based Projects Gensol Group technical Bankability Guidelines, Solar Bankability, 2017
  31. 31. About Gensol Solar Advisory Services Solar EPC Services Solar O&M Services 11,707MW 91 MW 2200 MW Gensol Group Gensol provides concept to commissioning solar advisory, execution and operations services for Solar Projects in India and abroad. 150 Advisors Anmol Singh Evangelist +91 7698833311 anmoljaggi@gensol.in Imran Naqvi Head of Strategic Advisory & Business Development +91 9327016962 imrannaqvi@gensol.in Gurpreet Singh Head of Engineering & Operations +91 9725544301 gurpreetsingh@gensol.in Puneet Singh Jaggi Director +91 9998025820 puneetjaggi@gensol.in Pranay Mundra President +91 9850673664 pranaymundra@gensol.in Shivya Singhal Head of Supply Chain & Group CFO +91 9376703846 shivyasinghal@gensol.in 230+ Projects 70 Engineers 170+ Projects 210 Engineers 45 Projects
  32. 32. Gensol is one of the leading consultants and system integrators for Solar Power Plants. We boast of a portfolio of over 6000 MW of Solar Photovoltaic Plants. Gensol is also a channel partner to Ministry of New & Renewable Energy and installs kW scale Solar Rooftop systems on a turnkey basis with more than 42 MW of cumulative installations across the country. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Email: solar@gensol.in | Web: www.gensol.in | Phone: +91 79 40068235 | Twitter: gensol_tweets Gensol Engineering Pvt Ltd | Gensol Consultants Pvt Ltd | Solarig Gensol Utilities Pvt Ltd Corporate Office A2, 12th Floor Palladium, Opp. to Vodafone House , Corporate Road, Prahladnagar, Ahmedabad, Gujarat. India - 380015

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