2017 saw the largest ever increase in renewable power capacity, falling costs, increases in investment and advances in enabling technologies, according to the Renewables 2018 Global Status Report, by REN21.
Solar photovoltaic (PV) capacity installations were nearly double those of wind power, adding more net capacity than coal, natural gas and nuclear power combined. While this is great news for the renewables industry, complex solar PV equipment and systems raise questions for customers and investors, such as how can they know that a system really is good, and how much more would they be willing to invest to ensure they get a higher quality system that actually yields the projected technical and financial performance – or even more over the long haul?
Mitigating risk through standardization and certification
This is where IECRE, the IEC System for Certification to Standards Relating to Equipment for Use in Renewable Energy Applications, comes into play. Established in 2014 to address the specific requirements of the solar PV, wind and marine sectors, the system covers the design, manufacture, transportation, installation and maintenance and testing of RE equipment using IEC and other International Standards.
Ensuring safety, performance and sustainability
During the Solar & Storage Finance USA 2018 event in New York, which aims to help delegates understand how debt providers are evolving propositions for solar and storage projects, and how they can access projects for standalone and co-located projects, I talked about the benefits of IECRE certification for solar PV systems during the session: How can an internationally recognized rating system become a driving force for the energy transition?
Under the IECRE System, the entire lifecycle of a PV power plant can be certified (and in future rated), which means the inception and operation phases are covered as well as the secondary market. IEC International Standards used by the System cover many critical design, quality, safety and performance aspects, and the rating system that is under development will help to further the differentiation of quality levels.
The reality is, however, that performance risks are to be found about everywhere. According to an analysis by TÜV Rheinland, 30% of inspected operating PV power plants (out of a population of approx. 1.5 GWp) show serious defects requiring immediate action and the most prevalent causes of defects are related to the production of components and installation.
Another study by EXXERGY analyzing more than 3,600 insurance claim cases reveals that damages can range from just a few EUR/kWp to more than 1,000 EUR/kWp. Therefore, to effectively mitigate risks, the certification of a PV power plant would need a rating system in order to differentiate between different levels of quality, performance, and sustainability.
When managing PV power plant risks, many quality assurance practices seem to serve as viable mitigation measure, but soon, limitations may become evident. If performance deteriorates more than predicted and warranted by the manufacturers, or if at the time of incidental power degradation beyond calculated limits, the manufacturers are no longer in business, serious financial implications may evolve as a consequence.
Benefits of the IECRE rating system
A rating system is being developed by IECRE and EXXERGY, using International Standards and complementary expert criteria, in order to help assess the risk exposure that goes along with a PV power plant investment in a more effective and uniform way.
The IECRE effort aims to initially concentrate on three ratings (inception phase, annual certification, asset transfer) across three scales: utility, commercial and industrial (C&I), and residential. The ratings would cover the baseline (meaning component manufacturing, EPC, and O&M), the supervision of the project realization phase, and final technical project inspection aspects, resulting in a project rating ranging from AAA as the highest, down to D where the project doesn’t meet standards at all.
This way, investors will be able to see how low or high the risk exposure for the particular PV power plant investment actually is from a predominantly technical point of view. We are about to kick off the rating system development project, and while a substantial portion of funds have been committed, additional sponsors supporting the rating development project would be welcome.
Contact Thomas C. Sauer: email@example.com