Solar technology is getting cheaper and more efficient. That winning combination means that many of the oldest projects in the global solar fleet may be set for a facelift.
Throw in sunsetting subsidies, worthless warranties and a smattering of poorly built projects, and repowering and revamping (the latter involves changes that don’t increase capacity) will be an obvious choice for many developers in the years ahead, creating a big new subsector of the global solar industry.
More than 67 gigawatts of solar capacity will celebrate its twentieth birthday this decade, according to Wood Mackenzie. A large chunk of that capacity is in the European market, where solar repowering and revamping are taking off first. In the U.K. and Germany, projects lose their subsidy support once they reach 20 years of age.
Bad builds and bankruptcies
Several factors have driven the repowering and revamping seen to date in the market.
Many solar plants built in Europe before 2013 were rushed to completion to meet a feed-in tariff deadline, leaving a number of them "distressed and malfunctioning," said Hannes Langenhan, a PV repowering expert with the developer and operations and maintenance firm BayWa r.e. If those projects remain eligible for generous feed-in tariffs, their owners have a "strong economic incentive to act,” Langenhan told GTM.
Most solar projects have been installed to a high standard and continue to operate as expected, Langenhan noted. For projects running without any technical difficulties, Langenhan’s experience is that asset owners would rather not interfere.
In some cases, projects were built using equipment from suppliers that are no longer in the market. Even major solar inverter suppliers such as ABB have left the industry in recent years amid intense price competition.
The result is that it's gotten harder for O&M companies to source parts. In the case of central inverters, this could mean large chunks of solar projects being taken offline until the problem is rectified.
In such instances, developers may elect to go with a full inverter swap-out, the most common major hardware change.
“Repowering is very case-specific. Deciding whether or not to rip out a site depends on a lot of different factors. It could be subsidies, contracts or regional policies, in addition to, of course, just flat-out costs,” said Lindsay Cherry, solar analyst with Wood Mackenzie Power & Renewables.
Leveling up: Batteries and bifacial
Beyond negative incentives, there are a growing number of reasons why a developer might choose to repower a project that's otherwise running just fine.
In particular, batteries and bifacial modules can bring new benefits. In addition to avoiding curtailment and adding grid services revenue, energy storage could prepare projects for a post-subsidy life. NextEra is already eyeing battery additions across its U.S. fleet.
Bifacial solar modules are also capable of increasing the value of existing sites, particularly for projects with the right site conditions and generous support in place.
OCI Solar Power raised eyebrows in December when it installed new trackers and a block of bifacial modules at the Alamo I Texas solar plant — a project that had only been running for six years. In this case, a tracker replacement was the trigger. With all the modules having to be removed anyway, swapping some of them out for Longi bifacial modules made sense. The majority of the old modules and the inverters have been reused. The removed modules will be used as spares and the bifacial block provides a useful data set.
“There will definitely be cases of much, much younger sites being repowered,” said Cherry.
Patchwork solar policy
Local policy will be another big factor in determining whether solar projects get repowered. Different subsidy regimes have different rules on how operating projects can be adapted.
Some governments are leery of seeing their subsidy budgets being blown out by a proliferation of repowerings. If a government budgeted to support 500 megawatts of solar built in 2012, it won't be happy to see repowering swell the capacity of those projects to 800 megawatts. That’s the equivalent of swapping out the 250-watt panels of yesteryear in favor of their contemporary 400-watt equivalents.
Some regulators require proof that any modules being replaced are indeed faulty and ready to be packed off for recycling. France limits the increase in capacity of projects to 1 percent. In contrast, Italian projects can increase their capacity by up to 10 percent without jeopardizing their access to support.
Such policy considerations could impact where activity ramps up first. Langenhan said Germany, the U.K., France and Italy are the most active markets for BayWa r.e.’s solar repowering business at the moment.
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A new free research insight from Wood Mackenzie explores repowering and other solar systems and technology trends in the 2020s.