In the realm of solar photovoltaic (PV) projects, the critical aspect of operations and maintenance (O&M) often takes a back seat during the development phase, notes Chris Stacy, Director of Business Development at BayWa r.e. in the United States.
Stacy highlights a historical tendency in O&M contracts resembling practices from three to four decades ago in the wind sector. “O&M is kind of at a stagnant space, if you will. I think that it's very rooted in this kind of traditional methodology of how we go about doing it. For many years now, there's been this attempt to push down a fixed cost for the preventative maintenance bid. Everyone's trying to push the price down because these margins are very tight in these deals anyway,” adds David Barnes, Managing Director at BayWa r.e. Operations Services.
To address this issue, BayWa r.e., primarily a development company, established an O&M division with the intention of involving the operations team at an early stage, allocating nearly 10% of the development stage budget, according to Barnes. Externally, the company is increasingly engaging at earlier stages of development as a consultant to streamline project costs.
“We want to have a reasonable balance between our third party and our internal business, but we're trying to look at it and say, ‘How do we maximize the value of this asset?' ‘How do we maintain the value of the asset?' That is the primary reason for O&M, quite frankly—to maintain the value of the asset as it goes forward. And I think that message gets lost quite often, where people are just trying to make a living,” Barnes emphasizes.
The observations shed light on the challenges within the solar industry concerning O&M practices during project development and the evolving strategies employed by industry players to enhance efficiency and asset value.