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PV O&M market toward a more competitive environment

With the end or the reduction of incentives in some big markets one of the main drivers for creating value in the PV sector is the improvement of operating efficiency in existing plants through operations and maintenance, an increasingly central activity for many operators in different markets. We talked about it with Cedric Brehaut, analyst at SoliChamba.

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With the end or the reduction of incentives, in some big markets, such as Italy and Germany, one of the main drivers for creating value in the PV sector is the improvement of operating efficiency in existing plants through operations and maintenance. O & M is becoming an increasingly central activity for many operators in different markets. We talked about it with Cedric Brehaut, analyst at SoliChamba – Consulting & Market Research and author of the report “Megawatt-Scale PV Plant Operations and Maintenance: Services, Markets and Competitors 2013-2017”.

Mr Brehaut, the definition O&M describes a set of activities: which are the main services an O&M provider offers? what kind of companies provide this service and which are the typical clients?

For the main O&M services you can see the diagram below (click to enlarge, source: SoliChamba Consulting and GTM Research, “Megawatt-Scale PV Plant Operations and Maintenance: Services, Markets and Competitors 2013-2017“). The companies that offer O&M services are mostly: EPCs / Developers (Belectric, Juwi, GES); electrical / inverter firms (ABB, Schneider Electric); vertically integrated solar firms (SunEdison, SunPower, Martifer); IPPs / utility companies (Saferay, Solarig, Enel GP) and  independent O&M providers (Greentech, meteocontrol, Kenergia). The typical clients are solar system owners, ranging from private investors to large banks.

What about asset management: which activities does it involve, what kind of companies provide this service, how do they relate to O&M providers and which are the typical clients?

Asset management companies take care of the PV plant from a financial and administrative perspective. Sometimes they are the same as the O&M firm but in most cases these are separate firms. Wise Energy is an example of independent firm that does both.

Has the development of new technologies created new opportunities for O&M. Could you cite some examples?

Many plants were built too fast and have quality issues, so the opportunity does not really come from new technology but rather from trying to bring these old plants to the level of quality they were supposed to have when they were originally built. There are innovations like robotic solutions for module cleaning and drones for thermal imaging and detection of issues.

Which are the most attractive markets for O&M and for asset management?

I am not sure about asset management, but for O&M Italy is a very attractive market due to a large installed base coming out of warranty, a lot of plants being sold to new owners, and a lot of plants with quality issues that need some attention. Market prices in Italy are higher than in most other European countries. O&M is also booming in the U.S. But the context is different here (there are still a lot of new plants being built, and market prices are lower).

Which are the characteristics of the Italian market compared to others?

Higher O&M prices; many plants with quality issues that need attention; EPC and O&M providers going out of business; high cost and complexity of dealing with local authorities and utilities and large differences between regions

What about Germany?

I would mention: EPCs going out of business and spinning off their O&M groups; high competition on O&M services; lower market prices and no need for cleaning or security surveillance

What advice would you give to an EPC firm looking forward to become an O&M provider?

O&M is a very different from construction. It is a service business that requires infrastructure, qualified staff, and strong processes. It will be increasingly competitive so don¹t count on current price levels to remain stable, they will drop until the market consolidates and only the best and strongest O&M providers remain.

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