Solar Energy Service Fields
• EPC Engineering, Procurement, and Construction
• PPA Power Purchase Agreement
• O&M Operation and maintenance
What is Power Purchase Agreement (PPA)
A Power Purchase Agreement (PPA) is a contractual agreement between a power producer and a buyer. The buyer agrees to purchase electricity generated by a renewable energy project for a specified period, typically 7 to 15 years. The key aspects of PPA include;
• Without initial Investment: The buyer does not put up the initial investment • Long Term Agreement: PPAs are long-term contracts that ensure a steady revenue stream for the power producer and a reliable energy supply for the buyer. • Fixed Price: The price of electricity is often fixed providing cost predictability for both parties
What is Engineering, Procurement, and Construction (EPC)
Engineering, Procurement and Construction (EPC) contracts are agreements where a power producer is responsible for all activities from design, procurement, construction and handing over the finished installation to the end user who is the owner and buyer. The key aspects of EPC include;
• Turnkey Solution: A full installation from start to finish is done with initial investment from the buyer. • Single Party Responsible: The contractor is responsible for the entire project, reducing the owner’s risk. • Quality Assurance: The performance and quality of the project falls on the contractor.
Key Differences Between PPA and EPC
Financial Commitments
- PPA : involves financial commitments to the purchase of electricity over the contracted period.
- EPC : involves financial commitments for the construction and commissioning of the project.
Rick Allocation
- PPA : Shifts operational risks to the deveolper, while the buyer commits to a long term purchase of electricity.
- EPC : The operational risks also fall on the deveolper but the fluctuation of the project cast fall on the buyer.
Revenue Generation
- PPA : Focues on revenue generation from selling electricity for the power producer.
- EPC : Focus on the revenue gained from buiding, installing and selling the faclity as a whole for the power producer.
What is O&M ?
Operation and maintenance (O&M) is the process of ensuring that a business or organization runs efficiently and effectively.
Typically, O&M includes activities such as-
• Planning • Scheduling • Training • Monitoring • TroubleshootingIn recent years, O&M has become an increasingly important aspect of business Operate and maintenance as organisations strive to improve their efficiency and bottom line. While the term " Operate and maintenance " is relatively new, the concept has been around for centuries. Indeed, many of the world's most successful businesses were built on strong O&M foundations. Today, O&M is more important than ever, and those who embrace it are well-positioned for success.
What is Solar Operation and maintenance?
Solar Operation and maintenance (O&M) is a set of activities carried out to ensure that solar power plants are running smoothly and efficiently.
Solar O&M includes -
• Preventative maintenance
• Corrective maintenance
Preventative Maintenance
Preventative maintenance is all about nipping problems in the bud before they have a chance to cause major damage or downtime.
That means regular check-ups and cleaning for your solar panels and other equipment. By catching potential issues early, preventive maintenance can save you a lot of money in the long run.
Moreover, preventative scheduled maintenance helps to prolong the lifespan of your solar equipment and help it achieve its optimal performance.
With proper care, your solar panels can last up to 25 years—but if they're not regularly cleaned and maintained, they may only last for 10 years or less.
Regular preventative maintenance is necessary for PV System owners to get the most out of their investment.
Corrective Maintenance
Corrective maintenance is similar to preventive maintenance in that its goal is to keep your solar equipment running smoothly and efficiently.
Regardless, corrective maintenance is carried out after an issue has already arisen. That might mean repairing damaged equipment or replacing parts that have worn out over time.
Because corrective maintenance is reactive rather than proactive, it tends to be more expensive than preventative maintenance for solar contractors. However, it's still cheaper than letting an issue go until it causes a complete system shutdown.
Ideally, you should aim to catch problems early so that they can be fixed with minimal cost and disruption; nonetheless, corrective maintenance will always be necessary to keep your solar power plant running like new.
