Profit is any project’s main enabler to a fast ROI; solar energy farms are no different. Most renewable energy companies are formed of excellent entrepreneurs which are well experienced in solar farms projects development but when it comes to day-to-day operations most companies fail to excel. In fact, operating a solar farm should be managed by the same principles as any complex, excellence-driven system.
MMC IL (Moore Management Consulting Israel) has recently implemented a profitability enhancement project in one of Israel’s largest renewable energy companies, estimated at two billion US dollars.
We, at MMC IL, believe that “what can’t be measured, can’t be managed” and even if managed, a goal without a clear accountable owner will never be fulfilled. To produce and sustain profitability a company must have a clear vision of its performances.
A solar farm consists of thousands of photovoltaic panels and of complex electrical equipment for transmission and conversion. Optimal exploitation of the sun’s radiation is the “money maker” (i.e. PR- Performance Ratio). Overall equipment effectiveness is influenced by two main factors: electrical systems availability and the farm’s physical state (plantation causing shade, dusty panels, blocked access roads etc.).
There are key guidelines to follow to maximize the farm’s potential and increase PR and revenue:
- An independent operations unit separate from the construction unit.
- Operations unit which is accountable for commercial results. This unit should include a TCM – technical commercial manager which has an understanding and a real-time view of commercial implications caused by operational actions.
- O&M (operations and maintenance) routines for the electrical equipment and the farm’s surroundings. These routines should be effective, easy to apply and flexible (responsive in real-time). For example- dynamic teams, differential work plans etc.
- Compatible IT infrastructure to support real-time response and effectively manage O&M daily tasks.
Applying these things can bring an incremental improvement in profitability, even a 1% increase in PR can lead to a significant nominal change.