The EPC Paradox
Let’s face, as human’s we are by definition creatures of incentive. We see that in our retail buying habits – amazing how we are often drawn to that “Sale” sign in the store. We see it in our professional lives where our employers often incentivize us financially to achieve certain results. The most common such lever is sales commission – make a sale, get a commission.
Of course, Solar EPCs (Engineering, Procurement & Construction) companies are no different than the rest of us. For a number of years, EPCs have largely been incentivized by two motivating factors in building PV plants: Build them as fast as possible and build them as inexpensively as possible.
EPCs have historically needed to build PV plants in a hurry to assure they completed them in advance of some government imposed deadline, either real or perceived, that could materially impact the economics of the project. Witness the current situation in Massachusetts, where EPCs are scrambling to meet the Massachusetts Department of Energy Resources (MA DOER) extended deadline for its SREC II program, which is set to expire on January 8, 2017 (click here to learn more about this issue). Of course another great example was the Federal Government’s 1603 program which came into law during the great recession under the American Recovery and Reinvestment Act of 2009 but expired in 2012.
EPC’s are also of course driven by cost because the lower the cost of a plant, the easier it is to get to a higher IRR for the project’s investors. Of course, neither of those incentives is particularly consistent with the plant owner’s goal of having a high quality, consistently producing PV asset for the next twenty years.
As result, we here at Alencon are helping to address this paradox with our unique PV plant retrofits. By deploying Alencon’s cost effective DC-DC optimizers. SPOTS, a plant owner can very cost effectively improve the performance of his PV assets by addressing such panel mismatch issues as panel degradation, soiling and shading. At the same time, by deploying Alencon’s SPOT, the plant will increase yield with more granular MPPT, reduce conduction losses and improve inverter performance. The Alencon retrofit solution can be particularly helpful for any hastily built plants under the aforementioned 1603 program which may now be suffering from a variety issues leading to poor performance.