Solar maintenance to 'cost $9.4bn by 2025'
Solar energy repairs and maintenance costs are expected to grow to over $9bn by 2025, according to research by Wood Mackenzie.
The analysts said costs will hit $9.4bn by mid-decade as PV power systems nearing inverter end of life rise to 16% of the market (227GW) from about 5% currently.
Wood Mackenzie said Asia-Pacific will account for $4.1bn, Europe, Middle East and Africa $3.5bn and the Americas $1.8bn.
Wood Mackenzie principal analyst Daniel Liu said: “Inverter repowering is especially important in Europe, as more than 16GW of systems are currently over 10 years old. By 2025, that number will grow to 100GW.
“Ageing solar systems are an opportunity for repowering activities, while new projects can take advantage of advanced analytics.”
Solar inverters are estimated to need replacing every 10 years, but some systems present earlier faults, the company added.
Wood Mackenzie estimated that approximately 4.2GW of solar assets will run into premature failures in 2020, with this annual total jumping to 36GW in 2025.
Wood Mackenzie principal analyst Garcia da Fonseca said: “Premature inverter failures will grow as the global PV fleet ages.
“Though less than 1% of systems experience premature failure, between 10% – 12% of O&M costs are dedicated to inverter replacements.”
The widescale adoption of auctions is driving the levelised cost of energy for solar further down and putting additional pressure on O&M costs, the analysts added.
Liu said: “Europe has joined the markets that are phasing out renewable energy incentive schemes and introducing auction-based mechanisms.
“Auctions are emphasising the existent price-based competition for O&M services in established markets such as Germany.
“Developers and asset owners are exploring methods along the value chain to reduce overall costs, assuming more risk.
“In the O&M sector, this will happen through partnerships with different players oriented to a hybrid structure.”
Other factors impacting O&M costs include the content of contracts signed by developers and asset owners.
In the long-term, asset owners are likely to incur more costs with an 'a-la-carte' service structure than if opting for an all-in service contract, said Wood Mackenzie.
Da Fonseca said: “In reality, most O&M contracts currently signed on the lower end of the cost range ($3-5/kW/year) miss vital aspects of operating and maintaining a solar power plant properly.
“The typical scope included on current O&M contracts covers very few basic maintenance activities.
“With full-wrap contracts being avoided, vegetation management, corrective maintenance work and module washing are often excluded from the scope, despite being critical to keep solar power plants performing as expected.
“While these activities are heavily dependent on plant location and project specific characteristics, they can roughly represent 40-45% of a project’s total O&M costs.”
Last year, saw further consolidation in the global O&M market, as the top 15 vendors increased market share to 54% from 51%, Wood Mackenzie said.
Only Germany, the UK, the US and France, of the 12 markets examined in the Wood Mackenzie report, did not show any consolidation.
Spain experienced significant consolidation activity last year, as the top five players held 71% of the market share. This is up 9% from 2018.
