The clean energy industry has had shrinking prices year over year for the past decade. Module prices decreased 85 percent, accelerating solar adoption across the country. Average operating and maintenance costs followed suit, with lower equipment costs and greater economies of scale. This trend, however, is ending.
Asset owners often look for the lowest cost O&M provider but right now there are many issues causing costs to rise. Why are costs trending upwards? And does cutting costs lead to negative consequences for the project long-term?
Costs Trending Upwards
Rising Labor Costs
Operating and maintenance (O&M) for utility scale solar projects is based on labor. In fact, 70 percent of the true cost of solar operating and maintenance costs come from labor-based costs. But those costs are rising. Why? Several reasons. First the Inflation Reduction Act requires that laborers or contractors be paid prevailing wages (wages that are not less than the prevailing wages determined by the U.S. Department of Labor).
Second, O&M response times and technical abilities – which matter to asset owners – require qualified and experienced technicians. These technicians must be well paid, and the O&M provider must have a system in place to dispatch these technicians where and when they are needed. Well-trained technicians, who have site familiarity, and quick responsiveness are all possible when they are paid what they are worth; and in turn, the asset owner will receive high quality service.
Component Maintenance
Utility scale solar sites may last up to 30 years, but physical maintenance of the site must be done far more often. Component parts are not individually designed to last 30 years. Modules or inverters begin to fail around the 10-15 year mark. In fact, many inverter manufacturers from the early years of the solar industry are no longer in business, making repairs and replacements even more challenging.
In addition to the component costs, other costs are increasing due to inflation – everything from trucks to fuel to parts, and so on.
Getting What You Pay For
Long Term Asset Ownership
Long term asset owners understand the importance of real time monitoring, diagnostics, and preventative maintenance. Root-cause analysis of failures and correcting high and medium-priority issues when they occur requires an intelligent and responsive Operations and Maintenance team. Investing in quality O&M up-front leads to healthier assets in the long-term which means less overall corrective cost for the life of the asset.
Our priority at CSS is successful operating and maintenance of clean energy systems and we do this focused on the long term life of the asset. We pride ourselves on premium client service, maximum uptime for assets; and reliability. Our employees understand the sites they service and resolve issues as quickly as they can. In fact, we often take over sites that others have poorly handled. We’ve seen first-hand that it doesn’t pay in the long run to chase the lowest cost. When it comes to O&M, you get what you pay for.