U.S.-owned business intelligence firm Wood Mackenzie has attempted to evaluate the market opportunities offered by the repowering of solar projects around the world which feature inverters which are 10 years old â€“ as well as those which will expire ahead of time.
June 22, 2020
Some 4.2 GW of solar project capacity will experience inverter failures this year despite being less than ten years old, according to U.S.-owned analyst Wood Mackenzie, with the premature failure figure rising to 36 GW in 2025.
The Scotland-based consultancy this morning issued a statement about the opportunities offered by the global, non-residential-solar operations and maintenance (O&M) market, given inverters are generally recommended for replacement after a decade of service.
WoodMac estimates 5% of the worldâ€™s solar projects will reach the ten-year mark this year, with the percentage rising to 16% in five yearsâ€™ time. That means, the analyst predicted, 227 GW of solar capacity â€“ with all figures quoted in DC terms â€“ will need new inverters by 2025.
All of which adds up to a $9.4 billion O&M market opportunity in the middle of the decade, $4.1 billion of which will lie in the Asia-Pacific market as well as a $3.5 billion European, Middle Eastern and African marketplace and $1.8 billion of opportunities in north, central and south America.
Old World, old inverters
WoodMac principal analyst Daniel Liu pointed out the potential business on offer in Europe, where it is estimated more than 16 GW of project capacity is more than ten years old, with the prospect of more than 100 GW hitting that age profile in five years.
The analyst noted the increasing phase-out of fixed incentives in favor of reverse-auction-based procurement of new solar capacity was putting pressure on project owners to reduce O&M costs. That price pressure can lead to false economies such as signing up to cheaper O&M contracts which supply only a minimal level of provision despite the fact services such as vegetation management, corrective maintenance and module washing â€“ excluded by basic agreements â€“ can account for 40-45% of total O&M costs.
O&M service price pressure is also driving consolidation of the market, with WoodMac reporting the top 15 companies increased their market share last year from 51% to 54%, with U.S. provider First Solar again topping the rankings. Indian O&M firms Sterling & Wilson and Mahindra Teqo improved their position thanks to big wins from their project development sister companies in the Middle East, Africa and India and Sino-Canadian outfit Canadian Solar also moved up the ranking, thanks mainly to O&M project wins in Australia.