PV Performance Guarantees (Part 1): Page 6 of 8

Managing Risks & Expectations

The basic formula for specific production is shown in Equation 1:

Specific production = MWhAC ÷ MWDC-STC         (1)

As long as the methods used to determine the numerator and denominator are mutually understood, this index can be a very good starting place for PV performance guarantee negotiations. Of course, specific production is only an indication of relative system performance and depends on a host of parameters. Failing to reach a specific production goal usually indicates a poorly performing system, but it does nothing to help identify or fix problems. Understanding these limitations is key to properly using this index.

Performance ratio. The most widely used and accepted index of PV system performance is the performance ratio. This ratio separates out the uncertainty and variability of irradiance and is intended to normalize out weather factors to produce a consistent measure of system performance. It is therefore a useful equivalent for comparing PV plant performance regardless of technology or location. As such, it is usually expressed as a percentage calculated as shown in Equation 2:

PR = (EACTUAL ÷ EIDEAL) x 100%        (2)

where EACTUAL is the amount of energy that passes through the custody meter over a given period of time, and EIDEAL is the amount of energy that would be ideally expected, after correcting for temperature and irradiance.

Like an availability guarantee, which promises system or component uptime, a performance ratio guarantee requires a high level of service response. When both are provided as part of a performance guarantee contract, the EPC contractor ensures that the components work as described and that the system performs at the guaranteed level of effectiveness. The addition of an availability guarantee to a performance guarantee means the PV performance guarantee sponsor (the EPC contractor or developer) takes a more active role in plant management, helping to ensure total system performance even in the event of major component failures. This layered approach works well if there are several sub-metered production obligations or if the overall project includes systems across several sites.

Temperature compensation. Typically, the sponsor and the bank take the weather risk. More sophisticated contracts attempt to account for the performance risk associated with higher-than-average annual temperatures. While this is a more thorough method of assessment, a drastically different average temperature profile is unlikely during the term of a performance guarantee. Temperature fluctuations are typically within a few degrees Celsius. Therefore, the risk of temperature is inconsequential compared to the weight of solar irradiation. It is often expedient to simplify the documentation and limit metrics to include only solar input.

While temperature compensation tends to add complexity, module suppliers and EPC contractors wanting to limit risk may insist on it. In fact, some guarantors take a fundamental position to not guarantee weather impacts. If this is the case, Equation 3 can be used to calculate the temperaturecorrected nominal plant power (PTC):

PTC = [1 + γ x (TMOD – 25°C)] x PSTC           (3)

where gamma γ is the thermal coefficient of power from the module specifications, TMOD is the module temperature and PSTC is the system capacity value at standard test conditions. Calculating the system capacity value can be as simple as using the nameplate dc system capacity. However, some procurement contracts allow for a wide variation in module power tolerance. Therefore, flash-test data or other factory or field measurements may more accurately reflect the size of the generator installed.

Irradiance compensation. The next challenge is to determine the measurement and verification methods used to account for variable site irradiance. Standard test conditions, of course, are based on an irradiance of 1,000 watts per square meter. In the field, the available solar power (irradiance) in the plane of the array is variable between 0 and perhaps 1,200 watts per square meter and is constantly changing.

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