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Nov 22, 2023

India’s Solar O&M Market: A tale of increased domination of new evolving technologies

If you track the Indian solar sector or are a regular SaurEnergy reader, you

If you track the Indian solar sector or are a regular SaurEnergy reader, you might remember the increasing frequency of news reports on the topic of robotic cleaning of solar panels. Be it Ecoppia, Airtouch (incidentally, both are Israeli firms), or the domestic Skilancer Solar and many more, robotic cleaning has created a disruption in the Operations and Maintenance (O&M) market and made serious inroads into the sprawling Indian solar industry.

However, it is not just the robotic cleaning but a whole host of newer, data and Artificial Intelligence (AI)-driven approaches that seek to eke out every extra bit of energy and productivity out of these projects. That has meant the entry of many new players seeking to build a business in this emerging market, linked to India's massive solar expansion.

The new service providers can work with both, captive O&M and independent players by enabling the broader use of technology for increased operational efficiency, maintenance, and machine-based surveillance. These interventions are gradually making solar O&M more precise, less manpower intensive and a real competitive advantage when done right for developers.

Krishnan Kannan, Joint Managing Director from Jakson Green Private Limited, an O&M specialist for solar projects, is a big votary of the new technologies.

"Module cleaning has been significantly impacted by automation. Traditionally, washing modules involved personnel physically washing the panels. The operation is time-consuming and labour-intensive. In addition, this procedure may harm the panels and is highly dependent on the personnel's skill. Automated robots have made module cleaning much safer, more effective, and less harmful to the panels. As a result, it has made it possible to safely and effectively clean massive solar farms without endangering the safety of the employees."

He also added that some fundamental services like grass-cutting were another area where automation added benefits of increased speed and reduced drudgeries. "Various battery operated grass cutting machines and special equipment tailored for grass-cutting in solar plants powered by tractors are driving higher efficiencies," he said. Other solar developers also said that automation of O&M also led to the independence of fetching labour and workforce around the year.

Ravi Kumar, Vice President (VP) at Oorjan Cleantech Private Limited, raised another important issue: how these automation technologies are also helping solar plants eliminate the requirement of large quantities of water for cleaning solar modules.

"Robotic cleaning has revolutionized solar panel maintenance. These robots efficiently remove dust and debris from solar panels without using water, ensuring optimal performance without excessive water consumption. It contributes to water conservation efforts and reduces operational costs associated with manual cleaning. Automation has led to an increase in the frequency of panel cleaning, which directly impacts energy generation too," Kumar said.

According to estimates from the cleantech think-tank Council on Energy, Environment and Water (CEEW), India uses 7,000-20,000 litres of water to clean per Megawatt of solar panels, highlighting the immense impact on the local areas. However, with the use of automated robotic cleaning, the dependency on water has decreased exponentially. In robotic cleaning, the moving robots roll over the solar panels and remove dust, bird droppings, and other dirt from the surface to ensure their efficiency to optimal levels.

Even the Ministry of New and Renewable Energy (MNRE) in 2019 wrote to the state nodal agencies and project developers to take measures to avoid using more water for cleaning and adopt water-smart technologies for cleaning solar panels.

Amplus is one of Asia's largest distributed solar energy developers. Sunny Dixit, Deputy General Manager (O&M) from Amplus Solar, said it manages its O&M in-house. However, he points out the risk of jumping to conclusions about manpower requirements thanks to another key requirement, plant security.

"Two major O&M activities are critical and most cost-consuming. These are module cleaning and vegetation control. For projects spread in large land areas, both activities become challenging, especially in terms of resource deployment, both manpower, and machinery. Another major challenge for large solar projects is plant security. Solar projects use costly equipment spread across several acres. A large security team is needed for constant vigilance. Tech advancements can be of help in this regard. They will also help cut the manpower cost," Dixit told Saur Energy.

Several solar players Saur Energy talked to said that the majority of their cost in O&M goes into module cleaning, manpower, and security. However, with automatic robotic cleaning, the cost of module cleaning, which takes a good chunk of maintenance, often reduces multiple folds. Puneet Singh Jaggi, Founder and Chief Executive Officer (CEO) of Param Renewable Energy, the O&M arm of Gensol, also gave indicative figures on the cost benefits of automatic robotic cleaning.

He said that for a 450 MW solar plant in Rajasthan, if it uses semi-automatic robotic cleaning, it has to invest around Rs 1.50 lakh/MW DC annually. He said that if the same plant used automatic robotic cleaning, it would need to spend around Rs 1.20 lakh/MW DC annually. While semi-automatic cleaning would take up around 35% of the total O&M cost in module cleaning itself, under automatic robotic cleaning, the share of module cleaning cost could go down to 10 percent.

As per the Ministry of New and Renewable Energy, by the end of March 2023, India had a total installed solar capacity of 67.07 GW, whereas, for wind, it was 42.8 GW. Param's Jaggi explains that around 90% of the O&M prospects of wind projects are taken care of by their Original Equipment Manufacturers (OEM) through long-term contracts. Thus, only 4.26 GW of (10%) market is available for wind projects for third-party O&M.

On the other hand, he claimed that when it comes to the Indian solar market, the share of O&M for third parties remained at only 16.67 GW (25%) as 50 percent of the projects are self-managed while 25 percent are under their EPC contract.

As per the industry players we spoke to, the average expenses for O&M for each MW of a solar plant come at around Rs 3.5 lakh annually. With this baseline, the current market for third-party O&M in India for solar projects stands at Rs 583 crore (Rs 5.830 billion million) for 16.76 GW. Most players expect this to double every three years to 2030, to hit close to Rs 5,000 crores by 2030, driven by higher outsourcing by private sector developers to complement PSU energy majors.

The Optimal Energy Mix Report by the Central Electricity Authority (CEA) estimates that by 2030, India will have a total of 292 GW of solar. With the same calculation and rate, the O&M market in India would be around Rs 2,550 crore (Rs 25.5 billion) at the current share of outsourced players. But the key trend here is the increasing role of specialists and changing technologies, which is driving many developers to follow the PSU example and outsource eventually.

Jaggi also says that around 30% of the total O&M costs go into technical manpower and four percent into grass-cutting machines.

"With labour availability decreasing and right-of-way (ROW) difficulties increasing, asset owners prefer to incorporate robotic cleaning during the plant's construction phase rather than retrofitting it later," Jaggi told SaurEnergy. He, however, rues that the margin of O&M in solar projects is minuscule.

"They are either very small or negligent in government projects, and for private projects, it is often less than 10 percent," he said. Energy finance think tanks also agree with Jaggi.

Shantanu Srivastava, Energy Finance Analyst at the Institute of Energy Economics and Finance Analysis (IEEFA) told Saur Energy that the OPEX (operational expenditure) margin for utility-scale projects often ranges between 10-20 percent of the revenues. He, however, said that O&M costs are lesser for larger projects. "The O&M costs decreases as scale increases as investment in centralised systems and analytics can be done," he said.

Industry experts Saur Energy spoke to said five major heads make up a smooth O&M part of their renewable projects. These included–labour and workforce, spare parts and equipment, monitoring and control systems, cleaning and maintenance, and administrative and overhead costs.

And then there are categories like floating solar where developers have unique O&M challenges.

Deepak Ushadevi – MD & CEO of Ciel Et Terre Solar, a focused floating solar player, points out the unique problems the floating solar projects witness. He said there is a dearth of vendors providing semi-automatic robots for module cleaning activities. The firm manages its O&M in-house.

"Many projects in India still follow conventional methods in maintaining floating islands and cleaning activities. But, as we know, India is a price-sensitive market, and we must focus a lot on optimization and automation. As an industry leader, we have already taken measures for implementing the same with innovation," he said.

Industry experts claim that there is a direct linkage between the increase in generation and timely O&M services. Quadrical Artificial Intelligence (AI) provides AI services and remote monitoring of solar assets. Sharat Singh, Founder, and CEO of Quadrical AI, gave a breakup of the linkage of profits with increased O&M.

"Let's consider a 10 MW solar power plant in India with an estimated annual energy production of 15,000 MWh. Assuming an average selling price of electricity at Rs 5 per kWh, a well-executed O&M program that improves the energy yield by just 1% would result in an additional generation of 150 MWh per year. It would lead to an extra revenue of INR 7,50,000 annually. Over the project's 25-year lifespan, this increase in energy production could amount to an additional revenue of INR 18,75,00,000 (18.75 crores)," Singh said.

Moreover, according to a research report published in the International Journal of Sustainable Energy, one gram of dust per square metre of area on solar panels can reduce the efficiency of solar panels by up to 40 percent. India till now has already crossed 65 Gigawatt (GW) for the installation of solar projects.

On a 2030 target of around 300 GW, 70% of India's solar capacity by 2030 is yet to be built. That means players have every opportunity to assess and pick what works for them and the market.

Solar Labs is a solar design software company that helps solar companies during their pre-set-up period. It assists in designing their plants in such a way that it can maximize the generation and minimize costs. Udit Kumar, Sales Head at Solar Labs, said that their technology helps to simulate and analyse the performance of such panels and inverters under various operating conditions based on the local topography, shading, and local weather patterns.

Kumar said that the software helps reduce the risk of issues such as shading or equipment failures which can impact the long-term performance of the plant. He also said that most warranties from OEMs would not cover faulty installations or grid failures, which makes the planning phase and design crucial.

"In general, most equipment warranties will not cover issues related to installation errors or grid faults. It is, therefore, important to ensure that proper installation and commissioning procedures are followed and that grid integration is carefully managed. In some cases, specialized O&M firms may be able to help identify and address issues related to installation or grid integration, which can help to mitigate risk and ensure optimal performance," he said.

He added, "O&M firms typically have specialized knowledge and experience that can improve the efficiency and effectiveness of solar operations. In addition, they can provide a range of services, from monitoring and maintenance to repair and replacement, and can also provide valuable insights into performance optimization and cost reduction."

Quadrical AI is an asset operations platform with digital twin AI. It claims that its built-in predictive analytics helps solar plants improve generation by 2-4% and O&M efficiency by 15% with complete portfolio visibility on a single dashboard.

"With our cloud-based AI software at work, a solar system's health and efficiency are continuously monitored and optimized. It means we do the ‘Operations’ part of O&M automatically, so the ‘Maintenance’ part is much more efficient and effective," Singh adds.

An optimistic Singh adds that with pressure on lower costs for Power Purchase Agreements (PPAs) with state-backed buyers, O&M has to operate with razor-thin margins. It has led to solar developers trying to find out ways to increase their generation and efficiency, creating opportunities for AI solutions from firms like Quadrical AI.

"Plummeting PPA & panel costs have forced O&M and Asset Managers to figure out ways to improve operational efficiency and yield. However, they are also plagued by the unrealistic yield expectations set by industry standards like PVSyst, lack of effective investments in technology (which is why we witness abundant use of manual tools like Excel, stats-based tools etc.), and skyrocketing costs of drones/thermal imaging every 6-12 months," he said.

Dixit from Amplus also said that adopting technologies like ‘drone thermography’ for large-scale solar projects was effective, and it has undoubtedly helped developers and operators identify low-performing string/array or solar PV modules, which helped improve the generation and easy module fault identification and rectification.

"Module cleaning robots are the second-best example, which has deeply impacted the O&M business. Solving loss is a great challenge for any solar plant, and this also reduces solar PV modules’ efficiency over a period. Using cleaning rotors has solved the issue of high soiling loss and helped the developer achieve higher production," Dixit said.

Rajan Munjal is the Leader-National Channel Sales Manager at Sungrow, a cleantech equipment supplier. Munjal said software-based evaluation and maintenance solutions impacted the Indian solar market by offering improved performance monitoring, predictive maintenance, remote diagnostics, and data-driven decision-making benefits. In addition, he said that because of the emergence of many of these specialized O&M firms, many solar developers are now outsourcing their O&M works.

"The Indian solar market has been experiencing a shift towards outsourced Operation and Maintenance (O&M) services, although some large developers may still prefer in-house maintenance. The trend towards outsourcing is driven by factors such as the expertise and specialization offered by O&M firms, cost efficiency, the ability to focus on core competencies, risk mitigation, and the evolving market dynamics," he said.

Munjal also added that outsourcing allows developers to leverage the expertise and resources of specialized firms, optimize costs, transfer certain risks, and concentrate on strategic activities. "However, the specific approach to O&M can vary based on factors such as developer size, internal capabilities, project scale, and strategic considerations," Munjal said.

Colonel Narendra Verma, COO (Ground Mount) at CleanMax, told Saur Energy that his renewable energy company outsources its O&M activities to the best players in the market. Verma said it allows Cleanmax to focus on its core capabilities to develop larger projects. However, he lamented that there is still a paucity of an organized market in the O&M sector.

"The renewable market is still growing. However, while there are many existing and potential players in the market, the market still has very few established and trusted O&M players. Therefore, it is both an opportunity for new good players to establish themselves and competition for the existing players who need to continuously innovate and adapt to the latest technologies and customer requirements," he said.

Meanwhile, Verma also raised the need for the standardization of AI systems. "Software and AI interventions can help in productivity improvements through software algorithms and now with AI. However, these algorithms and models must be standardized with utmost care. Errors and bugs related to maintenance can even reduce productivity by false tripping, sending wrong notifications and messages to electrical engineers making the investment counterproductive if not tuned properly," he said.

Sharat from Quadrical AI meanwhile also talked about the issue of standardization. "To solve the challenges posed by unrealistic yield expectations and razor-thin O&M margins, creating highly accurate and granular performance benchmarks, personalized for any plant and each underlying device, using historical and real-time data, for acceptable DC, Inverter, AC performance. It will lead to Condition-based Monitoring – with deviations from the benchmark being tracked, characterized, and quantified for weather, structural degradations, shading, soiling, new-fixable issues – ultimately converted into actionable, revenue-prioritized work orders," he said.

Conclusion

However, most industry experts claim that large-scale solar players are taking up their O&M obligations. As a result, the share of the outsourced O&M market is expanding with their specialized, advanced, and evolving services, too, and they find several takers. However, most agreed that even in the outsourced O&M sector, which is slated to see more competition in the days to come, those giving the best technologies in a cost-competitive manner would thrive.

The solar revolution in India has just started to spread and make its presence felt. Therefore, it is essential for the country and the sector to look back, assess the performance of their assets, explore ways to increase their generation, make the plants more efficient, and adopt the latest advanced mechanisms to streamline their O&M. Timely course correction is much more needed before the sector expands gigantic.

Reporting by-Manish Kumar and Namrata Gulati Sapra