National solar cooperative shares staff to cut O&M costs by 35%
A new U.S. member-owned cooperative is to build a pool of certified staff and equipment from across the country to drive down operations and maintenance (O&M) costs and minimize full life-cycle risks for new plants, Stephen Irvin, CEO of project leader Amicus Solar, told PV Insider.
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Amicus Solar already operates a solar cooperative which leverages purchasing power to reduce equipment costs and the U.S. Department of Energy (DOE) has awarded $358,000 to Amicus Solar to build a new O&M cooperative.
Members of the O&M group will share staff and equipment from across the U.S., increasing the efficiency of O&M services for asset portfolios spread across multiple regions, according to Irvin.
Clients will slash travel times by using the services of the cooperative member closest to the plant. The target is to reduce overall O&M costs by 35% by 2019, Irvin said.
“We’ll drastically reduce travel costs, an item which our research has found to be a major barrier for companies trying to have a national reach,” he said.
O&M equipment will also be shared to reduce costs and avoid extra expenses with unnecessary equipment purchases.
“The cooperative business model is a unique model to reach not only a large geographic (area), but also to have a level of collaboration necessary to add efficiencies and reduce costs,” Irvin said.
The improved service offering would minimize the risks for new PV projects as well as plants already in operation, he added.
“Underperforming systems are not good for future investments in the industry,” he said.
Competitive market
Rapid expansion of solar capacity has led to a sharp drop in system costs and increased competition in the O&M market.
The National Renewable Energy Laboratory (NREL) has predicted the cost of U.S. utility scale solar will fall below $50/MWh by 2020 and has predicted average O&M costs could halve to $8/kw-yr, under an aggressive cost reduction scenario.
US utility-scale solar plants
Circle size reflects capacity. Red circles represent operating PV plants, orange are under construction and yellow are under development.
Source: SEIA
Larger U.S. plant operators are increasing upfront O&M spending in the development phase in order to improve plant reliability and optimize predictive maintenance strategies.
Operators and asset owners are investing in automated monitoring and data analytics to be more precise in identifying causes of system outages and avoid unnecessary labor travel expenses.
Labor costs account for up to 80% of PV O&M costs, Steven Hanawalt, partner at Power Factors, a real-time plant monitoring and asset management firm, told PV Insider.
Hanawalt had not seen full details of Amicus' new project but said a cooperative business model should raise utilization rates of assets and labor force.
“I definitely believe in the concept, and it is only a matter of time before it happens (in the O&M PV solar industry),” he said.
Labor standards
Amicus' new O&M cooperative will develop training programs and certification protocols to qualify the labor force and maximize productivity.
Amicus is currently considering collaboration with other accreditation organizations, like the North American Board of Certified Energy Practitioners (NABCEP), which currently runs certification programs for the roles of PV installer, technical sales person, and solar heating installer.
By training and certifying workers, the cooperative aims to standardize best O&M practices.
Laks Sampath, U.S and Latin America manager for asset management company Alectris, said there's a need for qualified O&M workers in the U.S. industry.
Training programs are important for solar plant operations and Alectris is in contact with Amicus to learn more about how the staff certification program, Sampath said.
“What our industry needs is people that are good at troubleshooting, it takes a completely different skill set,” he said.
Globally, solar industries are starting to implement standardised practices and performance metrics for PV plants.
Industry leaders estimate that almost half of Europe’s utility-scale PV market participants have already adopted O&M best practice guidelines published by SolarPower Europe in June.
The guidelines included a basis for standardized performance metrics for O&M services and large U.S. PV operators and service providers are also moving towards more accountable O&M performance amid increasing competition.
Members of the new Amicus cooperative will follow performance metrics that will be defined by the co-op owners, Irvin said.
Next steps
Amicus is currently finalizing legal documents to register the new O&M cooperative as a separate for-profit company.
“We are looking to recruit companies that have a lot of experience in O&M and a skilled staff, and in markets where new PV power plants are located,” Irvin said.
Around 20 of the 38 members of the existing Amicus purchasing cooperative have expressed interest in joining the new entity, he said. Irvin expects the new cooperative to release a list of members in January or February 2017.
Members will then decide payment rates, a scope of services to be offered, allocation of gains and losses, standards on contracts, best practices and performance goals.
Amicus plans to start operations of the cooperative by September 2017 and expects to achieve the overall O&M cost reduction of 35% two years after launching operations, Irvin said.
By Anna Flávia Rochas