Revenue Loss due to Solar Equipment Underperformance Rising Globally: Report
In 2022, the solar industry lost $2.5 billion due to power losses
Reduced power generation because of equipment underperformance has resulted in a loss of $2.5 billion for the global solar industry, according to Raptor Maps, an analytics, insights, and productivity software provider.
“We are progressively losing more power and more money, with an estimated annual revenue loss of $82 million across the 24.5 GW analyzed by Raptor Maps in 2022, translating to $2.5 billion in losses for the entire solar industry. When coupled with other learnings from the field – solar assets are chronically underperforming relative to pro forma assumptions – there is an enormous financial impact that the industry needs to address,” the Raptor Maps’ Global Solar Report.
The report quantifies and identifies leading drivers of equipment-related revenue loss, supported by their dataset of 80 GW of photovoltaic systems across 48 countries.
While each solar asset is unique and the rate of anomalies varies significantly, power loss as a result of equipment anomalies has increased every year.
Underperformance due to anomalies has nearly doubled from 1.61% in 2019 to 3.13% in 2022, recording a 94% power loss increase over the last 4 years.
This trend serves as a cautionary tale for the future, especially as the solar industry continues to scale and equipment manufacturing efforts are being ramped up.
With recent legislative and geopolitical tailwinds, the solar industry has seen increasing growth.
For instance, in the United States, the passage of the Inflation Reduction Act earmarked $370 billion for renewable energy and created unprecedented demand in the solar industry.
In Europe, geopolitical and policy pressures are pushing marked progress in the shift to renewables, with the EU installing 41.4 GW of solar and the REPowerEU plan proposing 320GW of new solar by 2025.
Power affected by anomalies is 3.13% today, but if anomaly-driven power loss continues at the current rate, that would grow to almost 6% by 2025.
In the U.S. when analyzing power loss by farm size, smaller sites exhibited the most variability in power loss and the highest average power loss as a percentage of their total generation capacity.
This variability and power loss present a unique challenge to the consumer and industries asset managers, who must focus on how to prioritize the remediation of high-value anomalies across a vast portfolio of smaller assets.
In larger site sizes, smaller ranges in power loss as a percentage of total site capacity were observed, but the largest sites tend to exhibit higher average power loss.
Sites between 100 MW and 200 MW were 9% higher than the global average at 3.40% average power loss, and sites above 200 MW were 29% higher than the global average at 4.04% average power loss.
These power losses bear a heavy revenue burden; for instance, sites larger than 200 MW are losing, on average, around $4,320/MW, with some sites losing up to $12,900/MW.
In cases of sites larger than 200 MW, the average underperformance due to anomalies has more than tripled since 2019, growing from 1.10% to 4.04% in 2022.
The resulting annual revenue loss is estimated at $82 million for the 24.5 GW of assets analyzed in 2022, which translates to an average loss of $3,350/MW.
Polycrystalline Module Defects
The report said polycrystalline modules are more likely to show module-level and submodule-level anomalies on inspection compared to thin film and monocrystalline modules.
It said the module’s age is highly correlated with the rate of defects present. For the two most common submodule-level defect categories, cell and diode anomalies, the rate of defect increases by 20-30% from Year 1 to Year 2; for cell anomalies, that defect rate increases by 495% for modules older than 5 years.
While analyzing sub-module defects, the report found:
- On average, inspections of monocrystalline modules have detected fewer anomalies than thin film modules by 41% and than polycrystalline modules by 65%.
- Thin film modules are 3 times more likely than polycrystalline and 12 times more likely than monocrystalline modules to have physical damage (such as cracking, delamination, and warped modules).
- Monocrystalline and polycrystalline modules face similar defect problems, with cell and diode anomalies being the most common for both.
The report said that as large-scale solar installations multiply, it becomes important that the industry ensures that it is delivering on its promises in terms of both power production and profitability.