Making the Case for Residential Photovoltaic System Monitoring
Inside this Article
As a provider of energy monitoring solutions, DECK Monitoring works daily with developers and...
In this two-part article, we describe the value of monitoring commercial PV systems. Topics such as...
In Part One of this article, we discussed the value of monitoring commercial PV systems. Here we...
One of the fastest evolving areas of PV technology, monitoring solutions provide essential business tools for dealers in the residential PV market.
In our high tech, fast paced world, we sometimes run into information overload. Our labor saving devices seem to constantly need something from us—a cell phone must be charged, a software application needs an upgrade or your car’s dreaded maintenance light blinks on. So why would we want to add data monitoring into the value proposition for a PV system? Because it makes good business sense.
PV system monitoring adds value to both you and your customer. It presents a great opportunity to differentiate yourself from your competitors, which can give you a competitive advantage in a tough market. When implemented properly, monitoring solutions make your business more profitable. In addition, it positively reinforces the purchase decision for your customer. In the long term, monitoring will be considered part of the cost of doing business.
PV MONITORING SYSTEMS
The majority of PV systems fit into five main categories: residential off-grid; nonresidential off-grid, such as for RVs or telecommunications; residential grid-tied; commercial; and power plants. The higher the value of performance for a given application, the higher the value of monitoring for that application. For example, power plant PV systems backed by financiers often have associated performance clauses. Companies installing this category of PV system have been including monitoring for years. The level of sophistication has grown dramatically given the need to maintain high uptime and the fact that utilities may need additional parameters monitored. Many sites require supervisory command and data acquisition (SCADA) systems.
Compare a large scale power plant system to a commercial building with a rooftop PV installation. The energy generated may be important, but the need to reduce operating expenses is paramount, especially for retail chains. Facilities managers are busy maintaining their buildings to provide the highest level of customer satisfaction, so spending time on O&M for the PV system often falls low on the priority list.
Making sure residential grid-tied systems stay on line seems to have even less value. Homeowners typically pay little attention to their PV systems after about the first 6 months. The total value of the electricity lost versus the cost to acquire and install a monitoring service is not often seen as compelling. But ensuring energy production is just one aspect of the value that a PV monitoring system provides. This article focuses on the additional value that monitoring systems can provide in the residential grid-tied PV market, a relevant and currently underserved market segment.
SYSTEM MONITORING IN THE RESIDENTIAL MARKET
Dealers and integrators typically use a cost-plus pricing model. You take your cost from your component suppliers, and you mark that up by your desired margin. Competitors who undercut your bid drive down the desired margin, and you either settle on a lower margin or you lose the job. Many dealers have done well to differentiate themselves by providing additional services or guarantees to help prevent direct price comparisons and maintain higher margins.
Installing a monitoring system as a sales differentiator is not a new idea; many of you have been including monitoring hardware and software for years. But in general, this is the exception. Only about 10% of residential PV installations include monitoring systems. These systems add extra cost— and your customers want lower prices. But communicating the value of your system over the competitors’ is what you pay your salespeople for. So, what does monitoring really mean to you and your customers?
The first thing most homeowners will tell you is that they want to know if their system is working. A case can be made that they can tell this either from their inverter’s LCD or from their monthly utility bill. This may be true, but most homeowners do not look at their system several months after it has been installed. Unless the system is large enough to provide the majority of the home’s energy needs, often homeowners will not notice any difference in their utility bills. If and when they do, they often will not know what may have caused the change—new rates, additional use of AC or heating, or something else.