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Defining an Industry: Solar PV Operations & Maintenance versus Asset Management

There are more solar photovoltaic (PV) systems in the U.S. than ever before and more of them are aging out of warranty coverage. The need to manage this portfolio of residential, commercial and utility-scale solar assets is accelerating a relatively new industry sector, solar PV operations and maintenance (O&M).

“The sheer size of the solar industry is driving O&M maturation,” said MJ Shiao, Director of Solar Research at GTM Research.  Worldwide the operations and maintenance (O&M) market for megawatt-scale PV plants will total 146 GW by 2017, according to GTM Research. 

The solar PV O&M industry faces several developmental challenges, including the definitions used to describe service offerings. 

Take for example, operations and management (O&M) versus asset management (AM).  These services are engineered to deliver the solar power plant’s prescribed energy performance and expected return on investment.  Yet these two terms, while they fuse at some point in the value chain of O&M services, describe specialized services to deliver on the solar investor’s expectations.

What is Solar Operations and Maintenance?

Solar PV O&M and AM services were clarified last year in the GTM Research report, “Megawatt-Scale PV Plant Operations and Maintenance: Services, Markets and Competitors, 2013-2017.”

“In the PV industry, the term O&M describes a set of activities, most of them technical in nature, which enable power plants to perform their task of producing energy in compliance with applicable rules and regulations,” states the report.

O&M activities can be described as on the ground including technical equipment fixes in the field, vegetation control and security.  

The report outlines the five major goals of solar O&M as:

  1. Optimization of plant production for increased asset revenue
  2. Reduction of risks for asset owners and investors
  3. Protection of asset value and longevity
  4. Compliance with applicable regulations (e.g., those set forth by the grid operator or environmental governance bodies)
  5. Transparency on plant production, performance, issues, risks and O&M activities

Moving into the cloud, solar O&M services reap monitoring information via a data acquisition system, or DAS, to deliver energy generation information and fault detection to the solar O&M service provider or asset owner’s office. More sophisticated systems deliver fault resolution information directly into the field including GPS mapping to guide truck routes, tools and replacement equipment to resolve component failure, tech login to signal completion and routing to the next destination.  Most DAS systems are geographically neutral, harvesting information for review no matter the site location of the solar asset.  Growing increasingly sophisticated DAS technology is expanding from reactive to predictive maintenance.

What is Asset Management?

O&M is sometimes considered a subset of asset management.  Asset management consists of the financial, commercial and administrative activities necessary to ensure a plant’s energy production translates into the appropriate revenue stream. 

AM activities are generally conducted in an office as opposed to out in the field.  These activities typically include billing and collections and sometimes distributions to investors, management of incentives, accounting and financial reporting, administrative interface with regulations, local authorities and grid operators and insurance paperwork and processing, according to GTM Research.

A quick review of service provider offerings reveals AM activities move a lot of critical paperwork:  accounting related including billing, energy production reporting for incentive programs, power purchase agreement energy billing and cash disbursements including those to investors, tax filings and financial audits, warranty and parts management related and insurance processing.

The Blue Collar and White Collar Solar O&M Teams

“Managing PV assets includes O&M and asset management, or 'blue collar' and 'white collar' functions,” states Stefano Cruccu, Project Manager of Solarplaza, organizers of the March 2014 event, Solar O&M North America.

“Because these two are highly interconnected it is important for both the O&M provider and the asset manager to understand each other’s perspectives.” Cruccu cites this mutual understanding as the main reason why the event Solar O&M North America focuses on both the so-called “blue collar” and “white collar” aspects of O&M.

This point of view sees the blue collar activities of the O&M provider as focused on the technology issues, whereas the white collar or asset manager intent is on the financial — non technical — side of the asset.  Both of these viewpoints will be highlighted in the March event, which is solely dedicated to solar PV O&M activities in the industry. 

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