Greentech Media Research and Solichamba Consulting have released a new report which forecasts rapid growth in the operations and maintenance (O&M) market for solar PV plants.
Megawatt-scale PV O&M and Asset Management predicts that this market will roughly triple from the 89 GW expected by the end of 2014 to 237 GW by 2018. 2013 and 2014 booms in the Asia-Pacific region are providing most of the market at present, and the report expects this region’s market share to continue to grow.
The report also predicts that the United States will be the second-largest national market over this period at 31 GW by 2018, driven by a boom in utility-scale project construction to beat the expiration of the federal investment tax credit.
A key observation of the report is that O&M markets remain even with fewer new projects coming online. When you stop building new plants, that is the only business left, notes report author Cedric Brehaut of Solichamba Consulting.
The companies estimate that despite a slowdown in the German market, the addressable utility-scale O&M market in that nation is still larger than 11 GW. Brehaut also notes that O&M markets remain in Italy and Spain, but describes these as zero-sum games where companies are simply capturing contracts from existing providers.
In all three nations the market is driven in part by construction companies which provided O&M services going out of business. However, there are a range of other reasons for project owners to switch service providers. Maybe the service is not good enough, or maybe the service is too expensive, Brehaut explained to PV Magazine. Or maybe you are an investor, and you have a lot of different assets, and you want them to all be managed by one provider.
The report finds that acquisitions of O&M companies and portfolios is a major trend at present, citing SMA’s acquisition of Phoenix Solar, First Solar’s purchase of Skytron Energy, and Shunfeng snatching up S.A.G. Solarstrom.
O&M is a game of portfolio scale and density, so the current trend of consolidation observed in 2013 and 2014 is expected to continue and accelerate, particularly in highly fragmented markets like Germany and Italy, says Brehaut.