Abstract
We assess the performance of a fleet of 411 utility-scale (i.e., >5 MWAC and ground-mounted) photovoltaic (PV) projects totaling 21.1 GWDC (16.3 GWAC) of capacity, which achieved commercial operations in the United States from 2007 to 2016. This fleet of projects contributed more than 50% of all solar electricity generated in the United States in 2017. Using detailed information on individual project characteristics, in conjunction with modeled irradiance data, we assess the extent to which actual first-year performance has lived up to both modeled and stated expectations. We then analyze system-level performance degradation in subsequent years by employing a “fixed effects” regression model to statistically isolate the impact of age on system performance. We find that this fleet of utility-scale PV projects has generally lived up to ex ante expectations for first-year performance but that subsequent system-level degradation—found to be −1.3%/year (±0.2%)—has, on average, been worse than both ex ante expectations (commonly −0.5%/year) and results from past studies (ranging from −0.8%/year to −1.0%/year). We emphasize that −1.3%/year is a system-level estimate that captures more than just module degradation (e.g., including soiling, balance of plant degradation, and downtime for maintenance and/or other events). A side analysis of a variety of project characteristics suggests that system-level degradation rates tend to be of lower magnitude among newer projects and larger projects and at sites with lower long-term average temperatures.
Highlights
The deployment of photovoltaic (PV) modules in large, utilityscale configurations is a relatively recent phenomenon
We use an iterative process to allocate known system-wide solar curtailment across those solar plants facing the lowest locational marginal prices (LMPs), on the theory that these lowest-value projects will be the first to be curtailed. This process begins by focusing on projects that face negative LMPs; if those projects are unable to absorb the full amount of known system-wide curtailment, we focus on projects facing very low positive LMPs (e.g., $0–$5/MWh) to allocate the remainder, progressively ratcheting up the LMP threshold as needed until all system-wide curtailment has been allocated to specific projects
Using an in-house financial pro forma model and assuming the following parameters—$1.2/WAC CapEx, $20/ kWAC-year OpEx, 30% net capacity factor, 4% debt interest rate, 2.5% inflation, 27% combined federal and state income tax rate, 30% investment tax credit (ITC), and a capital structure that varies based on a debt service coverage ratio of 1.3—we find that a generic utility-scale PV project with a levelized 25-year power purchase agreements (PPAs) price of $31.5/ MWh would generate an internal rate of return of 10% assuming a degradation rate of À0.5%/year, but only 5.1% if actual degradation turned out to be À1.0%/year and only 2.6% if actual degradation turned out to be À1.3%
Summary
The deployment of photovoltaic (PV) modules in large, utilityscale configurations is a relatively recent phenomenon. With such a young fleet of utility-scale PV projects supplying the majority of solar generation in the United States and with the utilityscale sector projected to continue to dominate the market in the future, it is crucial to understand how these utility-scale projects have performed to date. To date, most analyses of PV project performance have occurred among smaller, distributed PV systems—understandable given the much longer operating history of that market segment Many of these studies have tended to focus primarily or exclusively on module-level performance and degradation, ignoring the potentially significant effect of “balance of plant” or “balance of system” components on overall system-level performance. We find that this fleet of utility-scale PV projects has generally lived up to ex ante expectations for initial performance but that system-level degradation has, on average, been worse than both ex ante expectations and results from past degradation studies
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