This article originally appeared in the Solare B2B April 2015 Newsletter. It is reprinted here in the English translation.
2015 AND 2016 ESTIMATES POINT TO A GROWTH IN THE O&M PV MARKET IN ITALY. SOLAR PV PLANTS STILL NEED GOOD MANAGEMENT AND MAINTENANCE. RENEGOTIATION OR CONTRACTS EXPIRATION HAVE CAUSED O&M (OPERATIONS AND MAINTENANCE) SERVICE PROVIDERS TO ADDRESS THEIR CUSTOMER SPECIFIC REQUIREMENTS WITH NEW AND EXPANDED OFFERINGS.
The vast number of solar photovoltaic systems constructed in Italy in between 2010-2011 today represent a high potential market for companies that deal with O&M, especially for those cases where the plants have been not been properly engineered or rely low quality equipment.
If we add to this the fact that different operators, due to the market downturn, have left the market and several plants without assistance, today many installations in the area, although operational, often highlight problems and inefficiencies of various kinds. In a scenario of this kind, and with a photovoltaic park that has installed over 18 GW, the business opportunities related to O&M, that is, all those activities directed to the operational management and maintenance of photovoltaic systems, including monitoring, corrective maintenance, predictive and preventive, revamping, insurance management, still appears in a continuing growth, as occurred in the 2013-2014 period. A year ago, the Energy & Strategy Group of the Milan Polytechnic, at the presentation of the Solar Energy Report, provided estimates related to the growth of the O & M market.
“Relying on an installed base of about 18 GW at the end of 2013,” it said in the report, “operators in the industry, which traditionally had a value proposition oriented to the primary market, are increasingly interested in contracts in the existing market.”
In fact, traditional and new operators have turned to this business opportunity, in some cases with a differentiation of activities, as in the case of the EPC and producers of components, in other cases with the definition of new business lines entirely dedicated toward the specific O&M market.
As is clear from the study published last December by Solarplaza entitled “Overview of the European Solar O&M Landscape“, Italy is at second place in Europe for the number of companies involved in this segment (28% of total). In first position there is Germany, both for companies engaged on the O&M (31%), and both for managed MW (48%).
Renegotiation and Optimization of Costs
In addition to the growth opportunity inherent in the Italian photovoltaic installed solar portfolio, which in many cases needs new maintenance and management, in 2015 and in 2016 more business opportunities from O & M should come from the renegotiation of expiring contracts.
According to the Solar Energy Report, in 2015 the new power available for renegotiations for contract expiration could be around 429 MW for plants of between 200 kW and 1 MW and 678 MW for installations exceeding MW. Values could triple in 2016, when the new power subject to renegotiation could be around 3.3 GW. This boom is mainly caused by the exit from contracts signed under the 2nd and 3rd FIT Conto Energia.
For Italy, then the O&M remains an attractive market and with important opportunities for development. On the other side of the coin, however, there is the falling trend of prices for the services provided. Already in 2013, the average price of the O&M services declined by 48% compared to 2010 for plants exceeding MW and by 52% for plants under 1 MW. For 2015, the operators speak of a further decline in prices by about 10%. One reason is related in particular to the effects of retroactive measures that over the last year have affected the sector. The best example comes from the infamous “Spread-Incentives,” which provides for photovoltaic systems over 200 kWp, from 1 January 2015, a retroactive cut in tariffs for solar. The measure has put under severe pressure the business plans of many plant owners, who in some cases have decided to cut their own costs related to O&M.
The operators, however, are also aware of the impact the cost reductions will have on their margins. Many players have already put in motion an internal reengineering to provide the same services while optimizing costs. Analyzing the experience of some operators with their customers, has emerged a joint effort in optimizing the costs of maintenance services while ensuring at the same time all the necessary assistance for a faster return of the PV investment.
The Appeal of a Large Plant
As occurred in 2013 and 2014, even for the current year the main attraction for the O&M industry comes from industrial and commercial and large installations on the ground. The difference with a residential installation lies in the fact that for a large installation on the ground or to a roof system by several hundred kWp, the failure of a plant component can cause huge economic losses.
In 2014 the company Solar-Log had provided its own system for monitoring power consumption to an installation of 115 kWp installed in the province of Bolzano that lacked a system for the analysis of the production and reporting of faults. The system was able to promptly report the failure of an inverter which had not worked for a whole day. Thanks to the timely intervention, the owner of the plant has suffered a loss of only 40 euro. Without the intervention: if in the worst case the fault would have stopped the entire plant, the total loss estimated would have been around EUR 290 per day. If this value was compared to plants of MWp size, failure or stoppage of the plant would threaten entire business plan and repayment plans.
Today the aspect on which operators continue to insist is linked to the optimization of the system to ensure the end customer realizes a faster return on investment, both for plants connected a few years ago and for new installations. This trend has also led to a gradual evolution of the tools and activities used to optimize the production.
Until a few years ago, O&M was limited to activities that were little more than washing the modules and management of the vegetation, but today O&M aims to ensure increased productivity through the anticipation of malfunctioning components, with tools capable of alerting any kind of problem, and in some cases to real reengineering or revamping of the photovoltaic system.
In fact the revamping of plants is continuing to grow, which has the objective of recovering the productivity of installations through improvements resulting from the use of better performing technologies than those used during design and construction. Other activities highly demanded by customers are those concerning the inspection of equipment, control of security systems and tips and guidelines for improving the performance of the plants through the constant monitoring of the solar PV portfolio.
There is also great attention of the operators towards asset management activities, considered crucial for the final customers because of the growing complexity of large PV plant portfolios.
To protect solar installations not only from wear and tear of the components, in recent years several operators in the industry have focused their services also on security. In the O&M services they have added also the security management aiming to control the solar fields and prevent thefts.
This service enlarges the simple maintenance of barriers with infrared or microwave sensors, the alarm control units, cameras and sensors.
The security is a crucial aspect in Italy due to frequent module and copper thefts. For these reasons, many companies have expanded their services with ad hoc tools to monitor h24 the plants and in some cases, have intensified the relationships between companies and security firms able to intervene in a timely manner in the event of an emergency or theft.
One example comes from the Security Trust, which over the past five years has created a national network of companies operating in the private security sector, in order to meet the demand of customers who may be faced with these issues.
While having a large number of services is important to respond to any type of intervention required, to provide customer these services in a timely manner has proven to be one of the most appreciated added value services by many players.
Operators engaged in O&M have therefore established a number of qualified subcontractors on the territory with trained staff able to work in the proximity of the customer site. Once the signal of a possible fault reaches the monitoring room, the company gets in touch as soon as possible with an operator that provides details on the problem encountered and which offers the right solution for that type of failure. At that point, it is necessary for the inspection and intervention to take place in few hours to avoid a prolonged downtime.
After the timely intervention, another aspect on which the O&M players continue to invest is training of installers and partners.
Today interventions on PV systems are different and more complex than few years ago, so they require more expertise from professionals involved who, in addition to solving the problem with maintenance, must be able to provide the end customer options to ensure the plant works at its optimum level.
It is also important to grant skills and competencies adapting to the changing market conditions. We are witnessing an evolution in the relationship with subcontractors, a relationship that tends more and more to properly train and overview more closely their direct actions on the field, whose effectiveness can hugely affect the investment.
The development of O & M may also depend on the peak of the new power available for the renegotiation following the expiry of the contracts for more than 1 GW in 2015 and 3 GW in 2016
Italian headquarters: Piazzale Cadorna 10, 20123 Milano, www.alectris.com
- Monitoring and maintenance of facilities
- Technical and engineering support
- Preventive maintenance
- Corrective maintenance
- Plant performance guaranteed
- Performance analysis of solar systems and individual components
- Evaluation technique for optimizing long-term performance
- Service & Asset Management
O & M Portfolio 2014 Italy: about 50 MW
Emanuele Tacchino, Business development manager Italy, “Strong dynamism in the market from the renegotiation of contracts”
“I feel perfectly in line with the analysis of the Energy & Strategy Group of the Milan Polytechnic: the renegotiation of contracts is already giving vibrancy to the segment of O & M in Italy and will spark the increase in these services in the coming years.
I also agree on the downward trend in the cost of services, also due to a greater rationalization of the services required: today we are faced with customers increasingly informed and experts who are well aware of what services are strictly necessary and indispensable to ensure an optimized return of their facilities. We plan to close 2015 with at least 20-30 MW of new O&M, Engineering or AM contracts only with regard to the country. Basically we will focus more and more on large systems, the only ones able to create significant business today for the continued need for qualified management and maintenance or performance improvement interventions. “
Headquarters: Via JF Kennedy, 10 – 40069 Zola Predosa (BO), www.enerray.it
Services and facilities:
- Service and maintenance
- Complete Fault Management 7 days 7 with specialized technicians located throughout Italy with response times within 3 hours
- Dry modules
- Mowing grass
- Cover all risk inverters
- First-level photovoltaic inverters
- Management of all administrative
- Total extension of the guarantee to all system components
- Video Surveillance
- Control room dedicated to remote monitoring with ongoing management of alarms with possible detachment and reboot system remotely
- Detailed report sent monthly to the customer.
- Warehouse Enerray: storage of all spare parts
- Management and maintenance of all systems of intrusion and surveillance
- Thermography modules and use of technical equipment in order to optimize a predictive maintenance to minimize any abnormalities of the panels and connections
O & M 2014 Portfolio: 230 MW
Aldo Moretti, responsible for maintenance, “Professionalism and services”
“Enerray, belonging to the Maccaferri Industrial Group which operates since 1879 in the world of industrial production, currently runs in O & M about 230 MW and is the first operator in Italy, according to survey conducted by the Politecnico di Milano. In the period 2015-2016 we expect to continue to increase our portfolio of O & M through the acquisition of contracts for the management and maintenance of photovoltaic systems. The photovoltaic system must be kept in perfect working order to make the maximum compensation of taxation and legislation in recent years; this requires an operator O & M Italian with a solid, serious, professional and reliable even financially. I therefore believe that the relationship between customer and supplier is undergoing a radical change going from a subordinate relationship to a partnership where they shared common goals such as costs and revenues. An operator O & M of high technical and professional will no longer be seen as an increase in costs for the plant, but as an added value in order to maximize returns and consequently the profits. “
Headquarters: Via Cappello 12 / a35010 San Pietro in Gu (PD), www.esapro.it
- Satellite technology dedicated
- Continuous monitoring of the status of the various system components
- Organization in minimal time of assistance
- Management of all data and information
- Data analysis and report writing
- Service and maintenance
- Maintenance of security systems
- Dry modules
- Collateral management components
- Check and replacement of photovoltaic modules
- Verify the correct sizing of the strings
- Verification of the reliability of monitoring systems
- Restoration links MT
- Revamping the components of the security system
- Integrating video surveillance system
- Replacing alarm center
- Calibration and testing perimeter barriers
- Integration of the security system on multiple levels
- Managing paperwork and administrative
Fabrizio Mellini, Sales manager, “We need a common effort”
“For 2015 we expect a consolidation of the market of the O & M, due to the known changes in market conditions that require a review of the operating costs and services provided.
At this time serves an effort by all. Together with our customers we need to work to the same objective, which is to optimize the production, identifying the best solutions, and now the player who is able to pursue this goal, through professionalism and flexible services.
We provide a wide range of services, ranging from routine maintenance and repairs to the management of the site, to the control of production and the security services. We are also expanding the field of administration and corporate with other services related to the use of the energy produced. Who is able to offer all of these solutions with expertise, professionalism and optical optimization, will lay the foundation, with its customers, to a satisfactory relationship of long duration. “
Headquarters: Via Settebagni, 390-00139 Rome, www.kenergiasviluppo.com
- Control Room and Technical Safety (tele-surveillance) h24
- Supply of systems for monitoring and control hardware and software of own production
- Electrical controls
- Inspection and maintenance of all components of the plants
- Monitoring of security systems
- Park maintenance
- Cleaning modules
- Corrective and emergency
- Management of spare parts warehouses and warranties on components provided by the contracts
- Relations Working with periodic data analysis, list of interventions, suggestions and guidelines for improving the performance of the plants;
- Phone and email
- Inspections and periodic inspections
- Technical and economic evaluation of interventions for improving performance
O & M 2014 Portfolio: 200 MW
Paul Vincent Chiantore, Managing director. “Organized and flexible”
“In a phase in which the owners of large plants on land were put to the test by the decree Spread Incentives mean first of all propose a wide flexibility in the provision of management services and maintenance: work costs compatible with the requirements of market, while continuing to provide all the assistance and expertise of a company that made del’O & M its “core business”, in order to ensure the best performance in the works entrusted to us. This factor makes us confident for 2015, in fact we aim to increase our portfolio of O & M with at least an additional 50 MW plants. Our strength will remain, in addition to flexibility, the organization. With an operations center seven days a week, with direct technical in various Italian regions and with agreements with local businesses throughout the country, we are able to intervene in a timely manner for each type of failure. We believe this is the winning key to continue operating in a market segment characterized by high competition. “
Italian office: Viale Montenero 32- 20135 Milan, www.martifersolar.com
- Comprehensive monitoring
- Incident Management
- Preventive maintenance
- Corrective maintenance
- Warranty Management
- Upgrade & Retrofit Revamping
O & M 2014 Portfolio: 140 MW in Italy
Valerio Senatore, General manager, “Professionalism for every need”
“While it is true that there is a market in search of a competitive price, on the other hand we are able to demonstrate that there is a close relationship between cost and performance to customers illustrating the wide range of services that we offer daily and responsibilities related to the same. Today there are many interventions required in the field of O & M, by the analysis on general performance of the system, designed to identify what are the components that are not functioning properly maintenance of video surveillance systems, often overlooked during the construction phases and that give rise, in the ordinary, to frequent false alarms, with a very strong impact on the extra costs of the same. That’s why the monitoring systems and the relevant reports are increasingly the subject of attention from our customers, for the direct benefit of a real control of the production plant. Among the services most in demand then there is the ability to manage by the O & M provider each component of the system, the service completed to perfection by our company by hiring skilled technicians and trained to operate properly on any device, over to the support of the engineering department of the parent. “
Address: via Industrial Traversa III, 15/17 – 25060 – Cellatica (BS), www.securitytrust.it
- Production installations and installations of security
- Monitoring and maintenance of security
- Systems for video surveillance
- Central control 24 hours 24 to receive alarms
- Network security firms
Rudy Pumpkin, CEO, “We provide security”
“Security Trust has developed a range of services for the management and maintenance of security systems. The group’s mission is to offer customers the best security solutions available on the market. After the construction of the plant, Security Trust holds a relationship of full confidence and continuity with the customer through the maintenance service and assistance. It is a service that allows the customer to monitor with constant efficiency and effectiveness of the system security achieved. We guarantee all of this through our control panel that allows you to report any faults to the safety systems in a timely manner. Thanks also to the six branches of properties in the area and the network of collaborators built up over time, it is possible to work 365 days a year, 24 hours 24. Over the past five years we have created a valuable and important national network of companies operating in the private security sector, in order to meet all the needs. “