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

Managing Risks & Expectations

Instrumentation and accuracy. All performance guarantees have to be definitively measurable. The value of the measurement is directly proportional to all parties’ confidence in how it is measured. Instrumentation and accuracy should be explicitly addressed in the contract documents. A rigorous recalibration schedule is also vitally important to the agreement to help mitigate measurement errors.

Measured quantities. All parties have to agree on the measured quantities that ultimately represent the contract terms and conditions. If a contract specifies dc losses, for example, then the equipment needs to be in place to reliably and accurately measure the compliance of the dc system parameters. If there is an inverter efficiency guarantee in place, then third-party monitoring of dc input and ac output at the inverter is required at additional expense.

Identifying low performance. The PV performance guarantee terms must ensure that all relevant aspects of plant performance are quantifiable so that any deliberation as to the claim of low performance can be assessed immediately, beyond a reasonable doubt, and the magnitude of the shortfall can be specifically quantified. In the grand scheme of things, performance guarantees should prevent a PV system from persistently underperforming. Small differences between expected and actual output values are hard to justify, especially when it comes to assessing damages. A good performance guarantee helps identify and fix problems: When a PV system fails to perform as expected, there can be mutual agreement about the cure, and action can be taken to get it fixed.

Administration. Performance guarantee mechanisms always require documentation and proof for damage payment. Unfortunately, this documentation and proof process may incur excessive administrative costs. It is not uncommon for the cost of annual reporting to exceed actual damages. Some of these guarantees with cumbersome administrative requirements have clearly been negotiated with business development teams in isolation from the execution teams that do the actual work. These counterproductive guarantee terms seem to be extending further into the future, which can create decades of form filing that has little to do with keeping systems operational.

Deciding on the Details

In Part 2 of this article, we outline the major approaches to proof of performance. These different warranty or guarantee approaches ultimately determine what PV system performance measurements are required. We discuss the hardware required for the collection of plant metrics, as well as how the variables being measured actually impact plant performance and the verification thereof. We also examine the basic elements of a typical performance guarantee and what to look for when evaluating guarantee structures.


Mat Taylor / Quanta Renewable Energy Services / Greenwood Village, CO / quantarenewable.com

David Williams / dissigno / San Francisco / dissigno.com


Photovoltaic System Engineering, Roger Messenger and Jerry Ventre, CRC Press, 2000

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