By John Skibinski, Engineering Consultant for AETI
Recent trends suggest municipalities and utilities are becoming more educated and collaborating with greater frequency about solar farms. As a result, they are more selective in their project awards. These trends are affecting all project phases, including financing, design, construction, labor, utility grid stability/interconnection and commissioning.
As utilities work closer with the municipalities that regulate these projects, developers and contractors who understand the trends and align their efforts with them will be the winners. In an era of increasing contract disputes, this approach must include transparency and audits, in addition to a strategy for capturing more watts-per-dollar at a lower cost-per-watt.
Many municipalities and utilities view a solar farm as a series of pipes, mounts, racks and panels. They are looking to drive out costs related to repetitive, non engineering-intensive activities to reach grid parity. They expect cost-effective template designs with minimal engineering charges because there has been a lot of innovation in racking technology that adds efficiencies. Bids that include excessive engineering fees are not winning. With each bid award, municipalities and utilities continue to drive down the farm’s cost-per-watt.
Utilities are also looking for greater amounts of power and are seeking higher DC and AC solar farm voltages that mirror their own plant designs. Since these multi-megawatt projects are behind the fence, higher DC and AC voltages are more cost efficient to design and construct.
By using NEMA- and ANSI-rated higher-voltage equipment rather than NEC and UL building codes, for example, the balance of the system can be built at a lower cost-per-watt. NEC and UL require more expensive equipment containerizing with higher current and more expensive wiring to interconnect the equipment. NEMA- and ANSI-rated equipment, designed and built with NFPA 70E-arc flash hazard-condition mitigation, adheres to a higher industry standard.
The equipment is commissionable by authorities having jurisdiction, ensuring implementation of the appropriate medium voltage codes, practices and standards, including fencing and hazard/warning signage. Newer solar farms require balance-of-system equipment to be witness-tested with construction performed according to one-line diagrams submitted to utilities.
There has been a dramatic shift to local general contractors rather than national contractors or vertically integrated PV panel providers. Municipalities and utilities believe farms built by local professionals will cost less and be maintained better since the teams are located close to the project. Additionally, with taxpayer money at stake, project sponsors believe they have an obligation to use local engineering talent and construction labor.
In some states, using diversified suppliers is an important requirement for award consideration. This is a very serious issue. One firm bid the inverter supply through a diversified distributor and won the bid, but purchased directly from the inverter supplier. This behavior was not in compliance with the utility’s supplier diversity policy, resulting in severe consequences for the firm. The lesson is obvious.
Solar farm financiers are demanding greater fee disclosure from engineering and construction firms. They are closely auditing contractors’ books; some have gone back and collected on overcharges. Disputes regarding contractual performance are increasing.
Following a situation in the wind energy market involving double and triple construction invoicing, excessive labor charges and high markup of engineered equipment, financiers are determined to ensure charges are legitimate.
Promising to use specifically stated practices during the design phase, but using different practices during the construction phase is getting noticed by everyone involved. And money saved upfront is considered by financiers, municipalities and utilities against the long-term impact on operation and maintenance costs.
Financiers, municipalities and utilities seem to agree about commissioning, as long as the farm is built with equipment witness-tested to nationally recognized codes, practices and standards for the authorities having jurisdiction. Authorities are not concerned about the solar-array voltage level; they care about gaining a greater return on investment from the higher-voltage solar farm.