Solar Asset Life cycle Planning
You’re going to die some day, and so are your assets.
Let me know if you need a minute.
I want to talk to you about the importance of planning for the inevitable–that not too distant day when it’s time to say goodbye to some of your assets, be that through sale or decommissioning is coming.
The heady days of renewable energy growth are not behind us, but putting your data and your assets in the right context means you should be thinking about life cycle planning. As companies like Longroad are proving, you need to make your assets intelligent. This isn’t a wind-specific concern. It’s an interesting time for solar asset managers, too, with tariffs in the US pushing prices up, while improving technology drives prices down. If you’re even remotely considering focusing your growth plans in light of all this, then you should be thinking long and hard about maximizing the life cycle and valuation of what you’ve already got.
Repower, Repurpose, Resell
What’s your exit strategy? Will you sell off a given project in year 8, or see the thing through, remediate, and rebuild?
I was recently part of a webinar with Solarplaza and one of my colleagues on asset intelligence, and it was mentioned that every project is a “special snowflake”, and while I think that’s true in many ways (you won’t see the same confluence of weather, technology, and service providers very often), I think there’s no such thing as a completely unique set of scenarios. Wind power asset owners in Europe are already grappling with these questions, considering repowering their assets in 2020.
In general terms, here’s what you need to do:
Start by Putting Your Assets in Context
If you’re going to plan for the long-term life cycle of your assets, you’ll want to make sure you really understand them, centralizing your data, and putting it in context so that you can make better-informed decisions. If you’re working with 10 different software solutions, you’re getting a lot of noise with your data, and you’re probably not seeing the entire picture. You need to understand the age of your assets, the conditions a given project is subject to, and the lifecycle of parts.
If you’ve got a large portfolio with many small projects (meaning you’re focused on solar asset management) then the single best way to ensure you’re able to turn a profit is by automating. I hate to be a broken record, but you need processes and tools that support this.
Gather and Track Key Project Information
You don’t necessarily need to know the details of every project your company owns off the top of your head, but you need a centralized way of accessing and mobilizing this information quickly. Meaning you’d better have the tools in place to track, schedule, automate and forecast based on key information such as:
- What’s the current state of this asset?
- What’s my sustainable level of service?
- Which assets are critical?
- What are my minimum life cycle costs?
Build a Maintenance Schedule, But Account for the Unexpected
Do you understand which projects, and which components of a project need attention, and when? You need the right kind of inventory, fully documented and accounted for, and accessible on a quick turn.
What if you need to sell a given project in two years, and it’s performing at 70%? You should probably have a model for that.
Forecast for the Worst and Best Case
What about those pesky externalities? How do you deal with aging grid infrastructure affecting your production rates, or major natural disasters? At the very least, this is a risk you should be accounting for in your modelling for years to come. Even if you don’t plan to hold on to a given project for the duration of its life cycle, these figures will play into what you can command when it’s time to sell. That and an orderly data room always helps too 😉
