PV project financing and construction hindrances

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In his presentation, titled "Factors for successful project developers", Felix Holz, vice president of the German bank explained that in order to obtain project financing, developers must meet the requirements of every party involved, including those of a bank – something that is neglected by many when they begin to develop their photovoltaic plans.

Every party involved in a project, he said, has different requirements and, while a developer is involved for between one and three years, the relationship an investor and debt provider (bank) have to a project can last for over 20 years, and 15 to 18 years, respectively.

Consequently, to better the chances of obtaining financing, a developer must prove bankability, i.e. ensure a return on investment. What banks do not like are construction, technological and development risks, therefore these need to be addressed by the other parties involved. He added that a lot of projects are not bankable, simply because the banks are asked to take risks in the aforementioned areas.

He went on to outline the "Risk pyramid", where at the top, macroeconomics was highlighted as a high risk, followed by the country where the project is to be executed. The project itself, was deemed to be the lowest risk. Furthermore, he said the technology needs to be proven in the field, and not just in the lab, and that financially strong suppliers and warranty issuers need to be onboard. Once the bank has confirmed the supplier and the country is okay, it will then look at the project.

Risk assessment

Thomas Reindl, cluster director of Solar Energy Systems went on to moderate a session on Operation, Maintenance and Monitoring. From the podium, he told the audience that, according to German company Solarklima e.v., which conducted a study into the topic, of the photovoltaic systems that fail, 57 percent do so due to bad implementation and installation, compared to 30 percent of systems, which fall down on design and planning, and 13 percent of systems, which contain faulty components.

Meanwhile, on the same topic, Holger Mornweg of Solar Data Systems Asia Pacific stated that the two reasons why one must monitor their photovoltaic systems are: (i) to "eliminate the black box feeling; and (ii) to protect investment. "Lost production can never be recovered," he said, adding that the main reasons systems fail include: subsystem failure; undetected downtime; installation and design problems; and inefficient service and response.

He went on to say that proper monitoring is crucial for reducing both risk and the size of losses, in addition to optimizing and documenting performance, and taking care of problems "before the owner even notices".

Echoing the speakers before him, in his lively presentation, Solarpraxis’ Christian Steinberg identified the three places where "it can go wrong" in a photovoltaic system, namely: design; construction; and components.

In particular, he said it is essential to ensure enough ground clearance for a system, to avoid vegetation growing between the panels and snow build-up, for example, which can both lead to yield losses. Similarly, internal shading – panels overlapping, for instance – and contamination from dust are also vital to avoid, when designing an effective system.

Construction is also an area where attention needs to be paid. Often, he explained, the actual system deviates from the original design. While this can sometimes result in a better system, it is often the case that performance is lowered.

Other issues to watch out for include broken modules, shaky foundations, mismatched connectors and damaged cabling. All of these factors, if not implemented properly, can stunt the lifetime of a system, lower yield and cause warranty issues.