How to answer 5 tough questions homeowners have about ...

13 Jan.,2025

 

How to answer 5 tough questions homeowners have about ...

As a solar installer, you wear many hats. First, you're there to help homeowners figure out how they can achieve their solar power dreams. You recommend products, help design PV systems, and guide homeowners through the multiple decisions involved in transitioning to solar power. Along the way, Markus Virta, Director of Sales and Development for Bellingham, WA-based and Panasonic Elite installer, Western Solar, says installers often encounter some tough questions about solar panel modules. 

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He compiled some of the more challenging questions that homeowners along with guidance for how installers can provide excellent answers: 

1. The manufacturer uses an OEM for its solar modules. Does that impact the quality? 

Given the number of solar module manufacturers using OEMs, it's understandable that homeowners have questions. Installers can help alleviate concerns as well as provide context. For example, he often reminds homeowners that outsourced manufacturing is widespread across industries. "You know Apple isn't building their iPhones&#;they have OEMs doing that," he says. 

What homeowners need to realize, however, is that the OEM partnerships enable solar panel manufacturers to maintain their high-quality standards. For example, Panasonic requires its OEMs to meet specific product quality benchmarks and then accept or reject products that don't meet the standard. "It's a lot easier to tell an OEM partner that they're not hitting the mark than it is to correct something in a vertically integrated operation," Virta says. 

So manufacturers like Panasonic have full authority over the quality of the OEM product, and in many ways, they also have more flexibility. What's more, when manufacturers provide a 25-year warranty, then homeowners know that they'll stand behind the product quality for the majority of the solar panel's life. 

 2. There are many solar panels options. Should I save money by purchasing a lesser-quality module? 

Homeowners are often looking for places to save money&#;and the solar panel modules present an opportunity. With the perception that panels have become a commodity, homeowners may question whether prioritizing premium panels is worth it. Helping homeowners balance their budget with their solar goals is essential, Virta notes. But cutting corners by purchasing low-quality panels may cost homeowners more in the long run. "You want to evaluate the quality question with a long-term view," he says. 

Panels that come with limited warranties or at much lower price points may save homeowners money in the short term. But the potential for repairs that aren't warrantied and the need to replace panels that much sooner can increase the cost of your PV system over its lifetime. Look for manufacturers that offer premium products at relatively competitive prices.

A manufacturer such as Panasonic, for example, can help improve the ROI of your solar investment by providing a more efficient, high-performing panel along with a 25-year warranty that ensures the quality of the product. 

Virta also notes that installers should reiterate the importance of a manufacturer's history and future. "When you're buying a premium module, you're establishing a relationship that will last 25 years," he says. The warranty is one of the most important parts of your solar panel purchase; homeowners need to have confidence that the manufacturer will be around to service that agreement for decades to come. 

3. Which panels are the most efficient, and how do I evaluate that? 

Many homeowners zero in on efficiency. But for installers, this is another area where they can provide additional information and context. First, the efficiency of the panel does make a difference. A panel with an efficiency rating of 15% produces significantly less power than one with a 20%+ efficiency rating.

However, within premium solar panel modules, efficiency ratings vary only slightly. It's critical to help homeowners make accurate comparisons. Virta notes that installers should evaluate the panel's size compared to the output so that homeowners can understand the panel's efficiency per square inch. 

Importantly, installers should remind homeowners that efficiency doesn't make a difference if the PV system is poorly designed. They want a system that's as efficient as possible while still working within the parameters of their environment, structures, budget, panel quality, and more. "It's a balancing act that also factors in the longevity of the equipment, whether it's in a serviceable area, and the projected degradation of the panels," Virta says. 

4. The manufacturer is one component. Should I be concerned about the entire supply chain?

Selecting a high-quality solar module is an essential piece of a homeowner's PV puzzle. But ensuring that panel arrives on time and in good shape is something many homeowners overlook. Installers should talk to homeowners about the manufacturer's entire supply chain and their own role in maintaining the quality of the product. For instance, let homeowners know about the risk that microfractures pose to panels and that you've educated shipping and handling companies on how to prevent them. 

Also, talk to homeowners about your distributor relationships, including whether they distribute solar equipment as a primary focus and the process you have for denying damaged equipment that comes into your warehouse. You've likely worked with the homeowner to select the best solar panel module for their PV system. Showing how you prioritize the quality from the manufacturer to their doorstep can differentiate you from other installers. 

5. If I choose a quality solar module, does the installer make much of a difference? 

Of course, as installers, we know that the answer to this question is a resounding yes. Still, it's important to educate homeowners on why selecting the right installer is as important as choosing the right solar panel module. From providing information about products to designing the PV system to answering questions and responding to calls, installers can ensure that a homeowners' experience with solar power is top-notch.

"Installers need to demonstrate that they have a technical understanding of the PV system, that they can answer technical questions and solve technical problems," Virta says. 

Helping homeowners navigate the entire solar installation process is an important job. Answer the hard questions well, and you'll gain the trust &#; and referrals &#; of customers for years to come.

[Article 2] What Operators Needs to Know About BESS ...

This article is article two of a seven-part series on energy storage systems where we explore the questions we should be asking, the assumptions we should be validating and the things we should be monitoring to ensure the successful deployment of this important new asset class.

In last week&#;s article on energy storage, we discussed the kinds of information operations and asset management leaders in the industry need to successfully manage the operational performance of this new asset class. This week&#;s article will focus on the information gaps that operators are dealing with as they operate and maintain battery energy storage systems (BESS) and what can be done to close those gaps.

I would like to acknowledge Michael Eyman, Josh Corbitt of Origis Services and Ken Kim of Origis Energy for their expertise and contributions in writing this article. Origis is a leader in operating and maintaining solar and energy storage systems throughout North America.

WHAT ARE BESS MAINTENANCE REQUIREMENTS?

It should come as no surprise that there is little published information available for the maintenance requirements of the BESS asset class and that industry standards are just starting to emerge. Energy storage systems are a relatively new asset class, and the industry is very dependent on original equipment manufacturers (OEMs) for information related to required maintenance tasks and frequencies.

Because the asset class has so little operating history, OEMs must use engineering judgment, accelerated life testing and reliability tools like Weibull Analysis to predict equipment life and failure rates. The shortfall of all these methods is they are based on physical and statistical models, not real-world operating results. Also, OEMs have equipment warranty risk, which may include liquidated damages, so they tend to use conservative maintenance work scope and frequency assumptions.

With so many operational unknowns, manufacturers and system integrators are quoting widely different maintenance requirements to operators for essentially the same technology.

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MAINTENANCE SCOPE VARIATIONS

BESS operators report that the maintenance scope of services and OEM manual maintenance requirements vary considerably for the lithium-ion BESS asset class. This, even though battery energy storage systems are mostly comprised of the following 6 basic building blocks:

  1. The enclosure and thermal management system
  2. The battery modules
  3. The battery management system (BMS)
  4. The energy management system (EMS)
  5. The power conditioning system (PCS)
  6. The fire detection and suppression system

It should be noted that some storage systems supplied are being supplied with gas detection systems; however, if gas is detected in the system, thermal runaway may have already occurred so it is questionable about how valuable these systems really are.

Given the similarity of equipment scope for all BESS, you would think that the maintenance requirements from OEMs and system integrators would be similar. This is not the case. Some OEMs/integrators require semi-annual inspections and maintenance tasks be performed; others require annual. Some allow operators to provide in-warranty repairs; others reserve that work for themselves. Some say little maintenance is needed; others that many tasks should be performed.

Typical BESS maintenance activities include:

  • Component and system inspections
  • Thermal management system maintenance, including changing/cleaning of filters if not a liquid-cooled system
  • Annual capacity and efficiency testing
  • Thermal scans
  • Converter inspections and maintenance
  • Part replacements
  • Firmware updates

Solar power operators are particularly well-suited for BESS maintenance as many of the tasks are similar to those for maintaining solar power equipment. In discussion with operators, the biggest questions they have about scope are:

  1. What are the real maintenance tasks and intervals required?
  2. Can they be synchronized with the solar or wind power maintenance frequencies for hybrid systems?
  3. Can calendar-based maintenance be transitioned to a condition-based maintenance program?

The answer to all these questions come from real-world operating experience and data. To transition from arbitrary and inefficient calendar-based maintenance to maintenance based on the actual condition of the equipment, analytics from monitoring systems will need to be compiled to derive more economic maintenance schedules and programs.

MAINTENANCE COSTS VARIATIONS

Along with the discrepancies in scope, operators also reported that proposals submitted by BESS vendors contain a large variance in pricing for essentially the same maintenance requirements. Price variation was all over the map, sometimes varying by as much as 100% for apparently the same service.

Though market pricing for BESS field service maintenance runs about 3-5% per year of the total project costs, it is hard to get a firm handle on what actual O&M costs are. Some integrators allocate periodic power augmentation costs to a separate category, others include some or all of it in project operating costs (OPEX).

The reason for the large variation in O&M pricing seems to be due not only to the uncertainty around what it really costs to operate and maintain an energy storage system, but also in the &#;pricing strategy&#; of the vendors. By shifting costs from CAPEX to OPEX to long-term power augmentation costs, vendors can make their installation cost numbers appear more competitive. Like the solar and wind industry, an energy storage levelized cost of energy (LCOE) metric is needed to provide a true apples-to-apples comparison of project lifecycle costs.

So, what are the real costs of operating a BESS? Like its wind and solar predecessors, the true cost of energy storage O&M will only be known as the asset class matures, infant mortality issues are worked out by manufacturers, regulators send clear signals about what constitutes safe and reliable operation and historical operating data tells the full story.

If wind and solar projects are good indicators, initial forecasts from developers are optimistic. There will be an uptick or two to achieve safety and reliability targets, then costs will stabilize and mirror storage manufacturing costs. What owners and operators can do now is carefully track actual labor, material costs and battery replenishment costs using a good work order system and then feed that historical data back into performance models as better data informs the industry.

WHAT ARE BESS OPERATIONAL REQUIREMENTS?

If BESS maintenance practices are straightforward, the operational requirements of the asset class are anything but simple. In fact, compared to the typical solar power system, energy storage systems are operationally complex, and risk abounds if the operating functions of a storage system are not managed properly.

BESS operational requirements fall into five categories:

  1. Monitoring the warranty and performance guarantees
  2. Monitoring day-to-day performance and operations
  3. Periodic capacity and efficiency testing
  4. Responding to system emergencies, and
  5. Dispatching the unit into the market

Each of these activities involve the collection, processing and analysis of large volumes of operating data. While this could be said for any energy production asset class, the BESS asset presents some new challenges for operators that need to be understood and managed. Warranty management of BESS assets puts the onus of proof for operating within the warranty specifications squarely on the owner, and, therefore, indirectly on the owner&#;s O&M agent, the operator.

Let&#;s review the warranty administration requirements of the typical battery storage system.

HOW DO I MANAGE THE WARRANTIES AND GUARANTEES?

Industry standard warranties for lithium-ion batteries include two years of coverage for performance and product defects. Length of warranties depends on the risk profile of asset owner and its financial partners.

In some cases, extended warranties are bundled with performance guarantees or a necessity of performance guarantees. Extended warranties and performance guarantees of 10 years are often sufficient for financial institutions for proven Tier 1 battery vendors. For the others, full term coverage&#;if the parent company has a large balance sheet&#;or insurance will be required for financing.

How to best use warranties and the performance guarantees that accompany them needs to be carefully considered given the rapid technological improvement and price reductions of batteries. Most battery vendors now extend their guarantees beyond 10 years. But these guarantees are specific to the use case.

For example, typically, battery vendors will warranty their battery to 60% of its original capacity. How long it takes for the battery to degrade to 60% of its original capacity depends on how it is used. As long as battery capacity stay above the 60%, most battery companies will warranty the battery up to 20 years.

Developers, owners, and financiers will likely have a different view of how to best use performance guarantees based on their risk tolerance. Is it better to pay for guarantees (insurance) up front, use some portion of that money in a warranty reserve fund, or go without the extra insurance over the life of the project? Only the future will tell, but I suspect some large owners will take the additional risk on their balance sheet and forgo paying for extended warranties.

BESS performance warranties (or guarantees) are creating a whole new set of monitoring and data collection requirements for the operator that exceeds the requirements of the solar and wind power asset class. BESS performance warranties typically include guaranteeing the long-term capacity and availability of the system and may also include the system&#;s energy output, degradation rate and round-trip efficiency.

However, unlike a typical utility-scale solar power system where the operating regime has little impact on the maintenance of the warranty, the battery storage system warranty comes with a set of strict operating parameters that the operator must follow.

The warranty &#;operating envelope&#; typically specifies limits on the system operating temperature, state of charge (SOC), rate of charge/ discharge (C-rates) and cycles (charges/discharges per month and/or year). The operator is responsible for demonstrating with data that these operating parameters are never exceeded. Manufacturers require operators to collect and maintain operating data as evidence with a sample frequency of not less than every 15 minutes for the life of the contract. If they cannot, the warranty terms could be violated and the warranty voided, leaving the owner exposed.

The problem of warranty administration is further complicated by the fact that the operator is usually not responsible for dispatching the unit. BESS dispatch (scheduling the charge, discharge, ramp rate and cycling of the battery) is the responsibility of the scheduling coordinator (SC), which is often the asset manager, off-taker, or a 3rd party qualified scheduling entity (QSE).

Careful data collection, processing, analysis, storage and coordination with the SC is critical to avoid voiding the warranty and seriously compromising the economic life of the asset. Warranty administration and the preparation of warranty claims by the operator for the BESS asset class is arguably more complicated than for all other assets in the renewable energy asset class.

SUMMARY

The BESS asset class introduces a whole new set of data collection, monitoring, operation and warranty administration requirements that operators must manage. We believe energy storage system operators need to be equipped with a new set of skills, data and information tools to effectively manage and de-risk this asset class. Without the timely supply and use of this critical information, risk of project underperformance is high.

In the next article on BESS O&M, we will discuss with operators what kinds of tools and information they are asking for to help manage the long-term performance of this new generation of energy storge systems. Articles 4 and 5 will focus on similar needs for the BESS asset manager.

As always, your feedback is appreciated.

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  • Steve Hanawalt is Executive Vice President and Founder of Power Factors, LLC,
  • Michael Eyman is Managing Director, Origis Services,
  • Josh Corbitt is Director of Business Development, Origis Services,
  • Ken Kim is Head of Technology and Equipment Procurement, Origis Energy,