Rigorous due diligence can save developers of solar projects millions, write Michelle McCann and Lawrence McIntosh.

It seems that there are ever more alarming reports emerging on the long-term performance of solar plants. This year kWh Analytics released a solar risk assessment report that included headline-grabbing phrases like “chronically underperforming”. The same article points to research suggesting that degradation could be underestimated by up to 14% over a 20-year system life. A catastrophic number for most, if not all, medium to large scale systems.

It is important to keep in mind that things don’t have to be quite this bad; also this year, research continued on a system in Switzerland that continues to shine. The TISO system has panels that, after 35 years in the field, are performing at over 95% of the initial power measurement. It’s also good to keep in mind that prevention of such catastrophic underperformance is neither rocket surgery nor bank-breakingly expensive.

The first step to protecting yourself is to include a technical addendum in both your procurement and EPC (if relevant) contracts. The technical addendum should clearly lay out both the procedure for assessing module performance and the commercial resolutions in case of poor performance. It will also detail sampling rates and testing methodology.

Define what’s good enough

We recommend establishing an acceptable quality limit (AQL) for the batch of solar panels you are purchasing. This is the threshold percentage of panels that are permitted to be outside a particular quality standard. It is common to insist on a much tighter AQL for tests that look for safety concerns and to be more lenient on problems that are likely to be aesthetic. For serious safety issues, your AQL would likely be 0%, whereas you may be satisfied with 1% of panels slightly below power tolerance and even 4% of panels having minor visual defects that do not affect performance.

It is imperative that the technical addendum includes some qualitative pass/fail criteria. Without this, the risk is that you’ll end up in an endless roundabout of discussions on the topic of what is acceptable. Pass/fail criteria need to be specified as tightly as possible for all facets of production and performance you wish to control. Here are a couple of examples:

Once you know the quality level acceptable to you, the next step is to agree with your supplier on how to test and confirm the quality of the goods received. Don’t worry, ISO 2859 sets standards for sampling and pass/fail rates for any type of mass manufactured good, including solar panels.

When the news is bad

Knowing that a batch has passed or failed is not much use unless you know what will happen next. A passed batch is, of course, easy to manage, but a batch that fails needs to trigger a commercial resolution with your supplier. Don’t wait until the horse has bolted before shutting the stables. Have the discussion on commercial resolutions before you’ve committed to the purchase.

Typical commercial resolutions include: rejection of the batch and/or price reduction and/or supply of additional modules (most relevant where power performance is not met, and only where the site can accommodate more panels).

When to intercept your logistics chain

You need to choose a least-bad point in the logistics chain to do quality assurance. It is common for this to be done in all of the following three ways:

  • In-factory inspections: Typical for larger jobs and helps to ensure that the agreed BOM (Bill of Materials) is indeed what is being used and that the materials have been stored correctly prior to use (for example that the EVA has not passed the use-by-date and that storage conditions are adequate);
  • In-factory test witnessing: This will ensure oversight of every module that you purchase. Inspectors are looking to see that tricks are not being played and that the equipment and standards are used correctly. Much like doping in sport, however, the unknown unknowns remain a mystery to the inspectors, necessitating the final step, namely;
  • In-country random sampling: This is a key part of a quality assurance regime and should be detailed in your technical addendum. Sampling means that it is not necessary to test every panel. This step provides independent verification of results and an in-country assessment, so it also picks up on any damage that may have occurred in transport. It also provides a useful reference point for any later testing, which would normally be done as close as possible to site (or even on-site).

We recommend that the in-country random sampling include STC power testing and electroluminescence at a minimum. Ideally, wet leakage and a visual inspection would also be included. Doing testing at this point enables: the parties to have a shared baseline of module performance and condition from which degradation is later assessed; any “day one” module underperformance issues to be raised with the manufacturer prior to any further transport or installation works, and; an EPC to have greater confidence in offering performance ratio and output guarantees.

Impact on costs

Figure 1 shows the enormous savings that can be captured with a proper quality assurance regime. The cost of testing is recuperated many times over even if there is only a 1% power loss across the solar farm.

This work assumed a 120MWp solar farm. Loss was assumed to be due only to underperformance and micro-cracks. Loss due to underperformance was calculated as a percentage loss in output from day one, loss due to micro-cracks was assumed to result in a power loss from year 11 only. Losses due to other, more severe problems such as PID or LID are not included.


Michelle McCann and Lawrence McIntosh are partners at PV Lab Australia.