Study Finds Utility-Scale Solar Plants Degrade More Than Owners Initially Assume
Researchers from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory recently published a report in the Journal of Renewable and Sustainable Energy. The study, “System-level performance and degradation of 21 GWDC of utility-scale PV plants in the United States”, assessed a fleet of 411 utility-scale PV systems, totaling 21.1 GWDC of capacity, commissioned from 2007 to 2016. These photovoltaic (PV) systems contributed more than 50% of the total solar-generated electricity in the United States. The study found that system-level degradation rates of utility-scale PV systems were higher than assumed when initially deciding power purchase agreement (PPA) rates. Ultimately affecting the potential internal rate of return (IRR). It also found that newer PV sites degrade less, and PV sites in high long-term average temperatures degrade more.
The study focused on system-level degradation rates rather than module-level degradation rates. In the past, studies have focused primarily on module-level performance and degradation, which ignores essential system components, such as trackers, inverters, and breakers. These methods ignore these component’s effect on the “balance of system” and a PV system’s overall performance. The researchers found that at the system-level, degradation rates are higher than the rates used in PPAs, due to the majority of PPA rates using the module-level degradation rate of 0.5%. System-level degradation must be weighed when forming PPAs. By only using the assumed rate of 0.5% degradation, and with all other associated costs considered, asset owners and investors can expect an IRR of 10%. However, they’ll only receive a 5.1% return if the actual degradation turned out to be 1.0%, and a lower 2.6% return if degradation is the suspected 1.3%.
Utility-scale solar photovoltaic (PV) ground-mounted systems are the largest sector of the overall solar market within the U.S., and the fastest-growing form of renewable power generation. Nevertheless, most of the utility-scale PV systems used in the study were commissioned after the year 2014, showing that the industry doesn’t have extensive data on long-term utility-scale PV systems performance, unlike smaller PV systems. Due to this, Asset Owners and investors should require more rigorous and frequent monitoring of their PV systems and rely on the collected data rather than the assumed degradation. This finding is in line with the study Raptor Maps produced for the 2020 Solar Risk Assessment Report, where we found that diode and string anomalies were 60% more frequent after the first year of operation, read more about that study here.
It is necessary to perform frequent and standardized preventative maintenance inspections to combat the lower rates of return and high degradation levels. However, completing inspections at this magnitude while a portfolio grows will be strenuous on the operations and maintenance (O&M) teams and resources. By utilizing aerial thermography, O&M can scale affordably, and reduce the stress on labor resources, allowing organizations to monitor the PV systems regularly. Aerial thermography, when coupled with software post-processing, equips O&M teams with a standardized inspection method, and transparent data to enable efficient site remediation and prevent future performance issues. Raptor Maps provides accurate post-processing analysis of aerial thermography data to reveal the performance of PV systems. Our turnkey services enable the fastest adoption of aerial thermography and analytics worldwide.
System-level degradation rates need to be considered when formulating PPAs, and rigorous monitoring is required to ensure the Solar Industry continues its substantial growth. Raptor Maps has analyzed over 20 GW of solar PV systems, spanning 30+ countries around the world. To learn more about Raptor Maps and our software and services, please contact us.