pv magazine: Mining for gold in legacy PPAs
September 2022 issue
By Chris Chappell and Stephen Shirey of Clean Energy Associates
As the pace of solar installations quickens, developers are racing to find the best remaining sites and optimize their position in interconnection queues. But what if the best investment opportunity is hidden in a site built a decade or more ago?
Time gets the better of us all, and many early solar sites no longer perform as expected. Yet those sites generally sell power at prices today’s developers can only dream of.
What can be done to unlock the value in these legacy sites?
When a utility-scale solar site is first connected to the grid, the power purchase agreement (PPA) between the offtaker and developer spells out how much power will be generated, the price for that power, and penalties for non-compliance.
Underperforming systems cause headaches for system operators, and not just because of PPA penalties. There is also lost revenue potential to consider, and with the dramatic reduction in PPA prices over the past 20 years, each lost kilowatt-hour from a legacy PPA is worth several from one signed more recently.
While some gradual production loss is expected, the problem occurs when losses fall beyond the predicted. What causes this? There are two main culprits: module degradation and the lifetime of inverters.