Best Practice Guidelines For PV Cost Calculation

Best Practice Guidelines for PV Cost
Calculation
Accounting for Technical Risks and Assumptions in
PV LCOE
Deliverable D3.2
13/12/2016
Foreword
The photovoltaic (PV) sector has overall experienced a significant growth globally in the last decade,
reflecting the recognition of PV as a clean and sustainable source of energy. Project investment has
been and still is a primary financial factor in enabling sustainable growth in PV installations. When
assessing the investment-worthiness of a PV project, different financial stakeholders such as
investors, lenders and insurers will evaluate the impact and probability of investment risks differently
depending on their investment goals. Similarly, risk mitigation measures implemented are subject to
the investment perspective. In the financing process, the stakeholders are to elect the business
model to apply and be faced with the task of taking appropriate assumptions relevant to, among
others, the technical aspects of a PV project for the selected business model.
The Solar Bankability project aims to establish a common practice for professional risk
assessment which will serve to reduce the risks associated with investments in PV projects.
The risks assessment and mitigation guidelines are developed based on market data from historical
due diligences, operation and maintenance records, and damage and claim reports. Different
relevant stakeholders in the PV industries such as financial market actors, valuation and
standardization entities, building and PV plant owners, component manufacturers, energy
prosumers and policy makers are engaged to provide inputs to the project.
The technical risks at the different phases of the project life cycle are compiled and quantified based
on data from existing expert reports and empirical data available at the PV project development and
operational phases. The Solar Bankability consortium performs empirical and statistical analyses of
failures to determine the manageability (detection and control), severity, and the probability of
occurrence. The impact of these failures on PV system performance and energy production are
evaluated. The project then looks at the practices of PV investment financial models and the
corresponding risk assessment at present days. How technical assumptions are accounted in
various PV cost elements (CAPEX, OPEX, yield, and performance ratio) are inventoried. Business
models existing in the market in key countries in the EU region are gathered. Several carefully
selected business cases are then simulated with technical risks and sensitivity analyses are
performed.
The results from the financial approach benchmarking and technical risk quantification are used to
identify the gaps between the present PV investment practices and the available extensive scientific
data in order to establish a link between the two. The outcomes are best practices guidelines on how
to translate important technical risks into different PV investment cost elements and business
models. This will build a solid fundamental understanding among the different stakeholders and
enhance the confidence for a profitable investment.
The Solar Bankability is a project funded by the European Commission under the Horizon 2020
Programme and runs for two years from 2015 to 2017.
The Solar Bankability consortium is pleased to present this report which as one of the public
deliverables from the project work.
Best Practice Guidelines for PV Cost Calculation

2
Other Publications from the Solar Bankability
Consortium
Description Publishing date
Snapshot of Existing and New Photovoltaic Business Models August 2015
Technical Risks in PV Project Development and PV Plant March 2016

Operation
Review and Gap Analyses of Technical Assumptions in PV July 2016

Electricity Cost
Minimizing Technical Risks in Photovoltaic Projects August 2016
Financial Modelling of Technical Risks in PV Projects September 2016
Best Practice Guidelines for PV Cost Calculation December 2016
Technical Bankability Guidelines February 2017
Proceedings from the Project Advisory Board and

from the Public Workshops
Description Publishing date
1st Project Advisory Board closed meeting June 2015
2nd Project Advisory Board closed meeting December 2015
First Public Solar Bankability Workshop - July 2016

Enhancement of PV Investment Attractiveness
3rd Project Advisory Board closed meeting February 2017
Solar Bankability Final Workshop - Improving the attractiveness February 2017

of solar PV investment

3
Principal Authors
Caroline Tjengdrawira (3E N.V.)
Mauricio Richter (3E N.V.)

Ioannis-Thomas Theologitis (SolarPower Europe)
Contributors
Matthias v. Armansperg (ACCELIOS Solar GmbH)
Ulrike Jahn (TÜV Rheinland Energy GmbH)
Magnus Herz (TÜV Rheinland Energy GmbH)
Acknowledgments
The Solar Bankability Consortium would like to extend special thanks to the Members of the Project’s
Advisory Board for their input and support: 123 Ventures, Deutsche Bank, Grünstromwerk, HSH-
Nordbank, KGAL, SEL Spa, SMA, Solarcentury, Triodos Bank, WHEB Group.
In particular, we would like to thank Mr. Patrick Willmann (KGAL Investment Management GmbH &
Co. Kg.) and Mr. Neil Perry (Solarcentury Holding Ltd.) for their assistance in validating the numbers
we used in the LCOE sensitivity and scenario analyses.
Project Information
EC Grant Agreement Number: No 649997

Duration: March 2015 until February 2017 (24 months)
Coordinator: EURAC Institute for Renewable Energy (IT)
Project Partners: 3E N.V. (BE), ACCELIOS Solar GmbH (DE), SolarPower Europe (BE), and TÜV
Rheinland Energy GmbH (DE)
Disclaimer
The sole responsibility for the content of this publication lies only with the authors. It does not
necessarily reflect the opinion of the European Communities. The European Commission is not
responsible for any use that may be made of the information contained therein.

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Table of contents
FOREWORD .................................................................................................................................. 2
TABLE OF CONTENTS .................................................................................................................. 5
Figures & Tables ............................................................................................................................. 6
Glossary & Abbreviations ................................................................................................................ 7
EXECUTIVE SUMMARY ................................................................................................................ 9
1 INTRODUCTION ............................................................................................................... 12
1.1 Background and Objectives ............................................................................................... 12
1.2 Guide to Readers .............................................................................................................. 12
2 CATEGORIZATION AND RANKING OF TECHNICAL RISKS........................................... 13
2.1 Risk Categorization in the Context of PV LCOE ................................................................ 13
2.2 Sensitivity Analysis – Different Scenarios .......................................................................... 18
2.2.1 LCOE calculation and input data ....................................................................................... 18
2.2.2 Sensitivity of LCOE to input parameters ............................................................................ 18
2.2.3 Effect of risk mitigation measures on LCOE ...................................................................... 23
2.2.4 Case studies ..................................................................................................................... 29
2.3 Chapter Summary ............................................................................................................. 33
3 BEST PRACTICE GUIDELINES ....................................................................................... 34
4 CLOSING REMARKS........................................................................................................ 35
REFERENCES ............................................................................................................................. 36
ANNEX A – TOP 20 LCOE TECHNICAL RISKS AND MITIGATION MEASURE .......................... 37
ANNEX B – TOP 10 MITIGATION MEASURES COMBINATIONS FOR DIFFERENT MARKET
SEGMENTS AND SCENARIOS ................................................................................................... 48
ANNEX C – BEST PRACTICE CHECKLISTS ............................................................................... 51
C.1. Best Practice Checklist for EPC Technical Aspects ............................................................... 51
C.2. Best Practice Checklist for O&M Technical Aspects .............................................................. 57
C.3. Best Practice Checklist for Long-Term Yield Assessment...................................................... 65
C.4. Checklist for As-Build Documents – Type and Details ........................................................... 66
C.5. Checklist for Record Control .................................................................................................. 69
C.6. Checklist for Reporting Indicators .......................................................................................... 71

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Figures & Tables
Figure 1: LCOE technical risk categorization flashcard – example of a risk from the procurement phase ...................... 14
Figure 2: LCOE technical risk categorization flashcard – example of a risk from the O&M phase................................. 15
Figure 3: LCOE analysis for “high” scenario for ground-mounted utility system............................................................ 20
Figure 4: LCOE analysis - impact of ±20% independent variation of different input parameters for different scenarios 21
Figure 5: Classification of input parameters according to their impact on LCOE for a variation of ±20% of each input
parameter .......................................................................................................................................................................... 22
Figure 6: Relative change in LCOE for mitigation measure combinations under the “low” scenario for ground-mounted
utility PV system .............................................................................................................................................................. 25
Figure 7: Sorted relative change in LCOE for 255 mitigation measure combinations for ground-mounted utility system
for “low” scenario ............................................................................................................................................................. 26
for “medium” scenario ...................................................................................................................................................... 26
for “high” scenario............................................................................................................................................................ 27
Figure 10: Top 10 most effective mitigation measure combinations for LCOE reduction ............................................... 29
Figure 11: Impact of design review on LCOE – case study 1........................................................................................... 30
Figure 12: Impact of module testing prior to installation on LCOE – case study 2 .......................................................... 31
Figure 13: Impact of module cleaning on LCOE – case study 3 ...................................................................................... 32
Table 1: LCOE technical risk categorization based on impact on CAPEX, OPEX and yield in PV financial models ..... 16
Table 2: Input parameters used in the LCOE sensitivity analysis for different scenarios................................................. 19
Table 3: LCOE for different scenarios and market segments without any mitigation ...................................................... 22
Table 4: Cost of mitigation measures for the medium cost scenario as defined in [2] ..................................................... 23
Table 5: Maximum LCOE reduction and LCOE after the application of the best combination of mitigation measures.. 27

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Glossary & Abbreviations
AC alternating current
CAPEX capital expenditures

CE (marking) (or CE compliance) signifies that the product has met the safety, health, and environmental
protection requirements of the European Economic Area (EEA)
CM corrective maintenance
COD commercial operation date
CPN cost priority number

DC direct current
DLP defect liability period
DSL digital subscriber line

DSM document management system
EL electroluminescence (imaging analysis)
EPC engineering, procurement and constructions

EU European Union
FiT feed-in tariff
GPRS general packet radio service

GPS global positioning system
H&S health and safety
HVAC heating, ventilation and air conditioning

IEC International Electrotechnical Commission
I/O input/output
IP internet protocol
IR infrared (thermal imaging analysis)
ISO International Organization for Standardization
KPI key performance indicator

LAN local area network
LCOE levelized cost of electricity
LD liquidated damages

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LTYA long term yield assessment
MPP(T) maximum power point (tracking)
HV/MV/LV high voltage / medium voltage / high voltage

O&M operation and maintenance
OPEX operating expenditures
PLC programmable logic controller

PM preventive maintenance
POA plane of array (irradiation, irradiance)
PPA power purchase agreement

PPE personal protective equipment
PR performance ratio (of a PV plant)
PV photovoltaic
RMSE root mean square error
RV residual value (used in LCOE formula)
SCADA supervisory control and data acquisition

STC standard test conditions
UK United Kingdom
UPS uninterruptable power supplies

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Executive Summary
Establishing Best Practice Guidelines for Professional PV Risk Assessment
The Solar Bankability is a project funded by the European Commission under the Horizon 2020
Programme and runs from 2015 to 2017. The main goal of the Solar Bankability project is to establish
a common practice for professional risk assessment which will serve to reduce the risks associated
with investments in PV projects. To achieve this objective, best practice guidelines on how to
manage technical risks in PV cost modeling and financial model have been developed in the works
presented in this report.
The technical risks identified from previous works [1] were first categorized and ranked based on the
impacts on the CAPEX, OPEX and yield element in the PV LCOE. A sets of LCOE technical risk
flashcards (Annex A) have been created to serve as quick references for the 20 most common
identified gaps in the technical assumptions used in PV financial models. A sensitivity analysis was
then conducted to assess the relative impact of the technical risks on PV LCOE for different market
segments under different scenarios. The impacts of implementing different combinations of risk
mitigation measures on the LCOE were also evaluated. Using the outcomes of these works, best
practice guidelines (Annex C) in the form of checklists are developed.
Conclusions and Takeaways
LCOE sensitivity analysis
A sensitivity analysis was performed by varying six input parameters to the PV LCOE (CAPEX,
OPEX, yield, discount rate, yearly degradation and system lifetime) by ±20%. Each input was treated
as if one is independent from the others. The analysis includes three different market segments:
residential systems <5 kWp, commercial rooftop systems <1 MWp, and utility scale ground-mounted
systems ≥1 MWp. Three scenarios have been selected for this analysis – one representing PV
systems in mature markets such as Germany where high competition has driven the CAPEX and
OPEX prices down and the market is less risky; the second representing systems in market such as
Italy with a relatively high discount rate and where the irradiation level is high and the CAPEX and
OPEX are in the mid-range among the values in EU region; and the last scenario representing PV
systems in countries such as UK or Netherlands with high CAPEX and OPEX but with irradiation
level rather low and a relatively moderate discount rate. The LCOE sensitivity analysis results rank
the followings from having the most to least impact on LCOE.
Sensitivity of LCOE in 2015-2016 on CAPEX, OPEX, yield, discount rate, yearly degradation and
system lifetime (ranking from most to least impact)
1 2 3 4 5
Yield CAPEX Lifetime or OPEX Degradation
discount rate

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Technical risk mitigation measures and LCOE reduction
Eight mitigation measures have been proposed to address the LCOE technical risks identified in our
previous works [2]. Three of these are component testing, design review and construction
monitoring, and EPC qualification which can be implemented during the early phases of PV project
lifecycle. The other five – basic monitoring, advanced monitoring, visual inspection, advanced
inspection, and spare part management, are mitigation measures during the operational phase of
the PV system.
A total of 255 different combinations of these eight mitigation measures were evaluated. The LCOE
values resulted from the implementation of each mitigation measure combination were analyzed for
the three market segments and three scenarios. Finally, case studies consisting of three PV systems
with specific issues are considered: one case where poor yield estimation method has been used in
the design phase; the second case involves low module power output in the procurement phase;
and the last case where module cleaning is not included in the operational phase. The LCOE’s before
and after the application of mitigation measures for these three cases were calculated. The following
conclusions could be drawn.
PV LCOE reduction up to 4 to 5% is observed in all cases.
The different combinations of mitigation measures have a larger impact in lowering the
LCOE for scenarios where the higher CAPEX, OPEX, and/or discount rate results in a
higher LCOE.
Mitigation measures which are most effective in lowering PV LCOE are similar across all
three market segments and for all scenarios.
The most effective mitigation measures are those implemented at the early stage of
project lifecycle. Those implemented in the operation phase still show some positive
impact on LCOE but less gain is found.
Although the implementation of mitigation measures increase either CAPEX or OPEX or
both, the overall LCOE decreases as the gain in yield surpasses the extra cost incurred.
Mitigation measures most effective in lowering PV LCOE are:
1. Qualification of EPC;
2. Component testing prior to installation; and
3. Advanced monitoring system for early fault detection.
Best practice guidelines

Our works have highlighted that technical risks exist across all PV project phases, from as early as
the project is conceived to when the system is in its operational year. If not managed properly, these
could affect the CAPEX, OPEX or yield of the PV system and thus impact the PV levelized cost of
electricity. From our previous review and gap analysis exercise, it was highlighted that EPC, O&M
and yield calculation/estimation methodology are important aspects affecting the CAPEX, OPEX or

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yield. It is therefore important to ensure that the system yield calculation/estimation and all technical
aspects of EPC and O&M are based on best-practice quality. To this end, a set of six checklists have
been established to serve as guidelines for best practices in EPC and O&M technical aspects and
for yield estimation exercise. These checklists are presented in Annex C of this report. These
checklists serve to guide different actors along the PV project value chain in the process of realizing
and operating utility-scale (ground-mounted) and commercial rooftop PV installations. Since
residential systems have very different business models, the best practice guidelines are treated
separately due to the different nature of business models involved and presented in another report
of this project ([3]).

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1 Introduction
1.1 Background and Objectives
The Solar Bankability project aims to establish a common practice for professional risk assessment
which will serve to reduce the risks associated with investments in photovoltaic (PV) projects.
One of the principal objectives the Solar Bankability project is to develop guidelines on how the
technical risks over the PV project life cycle should be taken into account in the different cost
elements and when evaluating the PV investment cost. In this project we have reviewed the current
industry practices to obtain a view on how technical risk assumptions in PV investment cost
calculation are commonly accounted. With this information in hands, the consortium then performed
gap analyses between the present practice and the state-of-the-art methodology. The results of the
review of current practice and gap analyses in PV cost technical assumptions were presented in the
report Review and Gap Analyses of Technical Assumptions in PV Electricity Cost [1].
The results highlight that technical gaps generally exist across all PV project phases. They occur in
all elements of the PV levelized cost of electricity (LCOE), namely in the capital expenditures
(CAPEX), operating expenditures (OPEX), and energy yield estimation. There are two types of
technical risks: those which influence the PV system performance and energy yield but not
necessarily create a partial or overall outage of the plant, and those which cause failures which affect
both the plant availability and also the performance. The root causes of both types of risk could be
introduced either during project development (procurement, planning and construction) or during PV
operation (O&M).
In this report we establish a best practice guideline on how to address the technical assumptions in
PV cost modeling and financial model evaluation based on the knowledge from the review and gap
analysis work.
1.2 Guide to Readers

This report presents the best practice guidelines on how to account for the technical risks in the
CAPEX, OPEX and energy yield estimation used for the PV cost modeling and financial models.
In Chapter 2, the technical risks are categorized and ranked. We describe here briefly the risk, where
they can occur (i.e. project phase) and what LCOE variable are impacted (i.e. CAPEX, OPEX and
Yield). In addition, we perform a sensitivity analysis to assess the relative impact on LCOE for
different scenarios.
In Chapter 3, we present the best practice guidelines for different market segments i.e. the
commercial rooftop and ground-mounted utility PV systems. The guidelines are presented in a form
of various checklists which could be used in developing, operating and maintaining PV systems.
Finally, Chapter 4 presents the conclusions of the works described in this report with result highlights
and recommendations for potential future works.

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2 Categorization and Ranking of Technical
Risks
Technical risks exist across all PV project phases, from as early as the project is conceived to when
the system is in its operational years. The technical risks need to be timely and effectively managed
or they will affect the PV plant performance, either by causing gradual degradation which leads to
performance losses over time, or creating partial or overall system outage leading to abruption of
the PV plant production. When considering risk mitigation measures, it is worth keeping in mind that
PV technical risk management could be addressed not only from the technical but also from the
financial, legal or insurance perspective. Moreover, the risks could be spread over the different
stakeholders in the PV project development and investment value chain. This means the ownership
of the measures does not have to lie in the hands of a single party (e.g. the project owner or investor)
but spread over different stakeholders to optimize the mitigation costs and investment returns.
In this chapter, we categorize the important technical risks from the PV LCOE perspective, i.e. how
each risk is associated to the different cost elements in the LCOE. The criticality of these risks and
how strongly they influence the CAPEX, OPEX and yield are then analyzed by performing sensitivity
analyses for different cases. In these case studies, we look at multiple scenarios of technical risk
mitigation measures in different market segments. The results from these analyses are PV electricity
costs for the different scenarios and the possible reductions in the LCOE from the implementation of
the combinations of technical risk mitigations.
The outcomes of the risk categorization and sensitivity analyses are further used to recommend best
practices on how technical risks should be accounted for in the PV investment cost in the next
Chapter 3. These guidelines will serve to assist in the decision on where in the PV project lifecycle
mitigation measures for PV technical risks need to be placed and who the owners are of the
mitigation measures.
2.1 Risk Categorization in the Context of PV LCOE

In our previous work (Review and Gap Analyses of Technical Assumptions in PV Electricity Cost
[1]), we have identified the 20 most common gaps in the technical assumptions used in PV financial
models. Associated with these gaps are technical risks which could impact the PV LCOE; in this
report these risks are referred to as the LCOE technical risks. Many of these LCOE technical risks
have been identified in our earlier works presented in the report Minimizing Technical Risks in
Photovoltaic Project [2]. In this section, the LCOE technical risks are categorized based on how they
influence PV LCOE. The categorization is based on two aspects:
1. How the LCOE technical risk, if it occurs, impacts the CAPEX, OPEX or yield, and
2. How the LCOE technical risk mitigation, when implemented, impacts or influences the CAPEX,
OPEX or yield.
The categorization results are presented in a form of LCOE technical risk “flashcard”. Each risk
flashcard contains the following information:

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• The description of the risk;
• The phase at which the risk occurs;
• The key takeaway of the risk;

• The impact of the risk on LCOE;
• The category and description of the mitigations;
• The impact of the risk mitigation on LCOE.

Figure 1 and Figure 2 below show examples of the flashcards for two LCOE technical risks in the
PV project component procurement phase and in the plant operation and maintenance (O&M)
phase. The complete set of these LCOE technical risk flashcards is give in Annex A of this report. In
these flashcards, the procurement phase includes production and testing phases, and the
construction phase includes the transportation and installation phases as described in [1] and [2].
The decommissioning phase has been excluded from the flashcards.
Figure 1: LCOE technical risk categorization flashcard – example of a risk from the procurement phase
LCOE Technical 1. Insufficient EPC technical specifications to ensure Phase of risk occurrence
Risk that selected components are suitable for use in the Procurement Planning
specific PV plant environment of application
O&M Construction
Key takeaway PV plant component specification and requirement in the EPC contract should be as detailed as
possible to ensure that the components procured are suited for the intended PV installation,
specific application, site and environment
CAPEX OPEX Yield
Impact of risk LCOE variables impacted by this risk:
↓
Mitigations Component testing When specifying the technical requirements for PV plant
Design review + components in the EPC contract, in addition to the
construction monitoring component type and quantity, the specifications should also
EPC qualification include:
Advanced monitoring • All applicable certifications and conformances (e.g.
Basic monitoring IEC61215, IEC61730, IEC61701, IEC62804, IEC61716 for
Advanced inspection modules; IEC62109, IEC61000 for inverters; CE mark of
Visual inspection compliance for all electrical components)
Spare part management • The environmental condition the components will be
Others installed in (temperature, humidity, wind and snow load,
any special chemical exposure, corrosion risk etc.)
• For PV modules, module component bill of materials and
the proof of IEC certification documents for these
materials
Impact of LCOE variables impacted by the risk CAPEX OPEX Yield
mitigation mitigations: ↑

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Figure 2: LCOE technical risk categorization flashcard – example of a risk from the O&M phase
LCOE Technical 17. Missing guaranteed key performance indicators Phase of risk occurrence
Risk (PR, availability or energy yield) in O&M Procurement Planning
O&M Construction
Key takeaway Guaranteed performance indicator is important to ensure that the plant operation and
maintenance is carried out properly
CAPEX OPEX Yield
↓ ↓
Mitigations Component testing • Require the operator to guarantee plant performance or
Design review + availability which will be assessed on a yearly basis
construction monitoring • Include all details of the performance indicator, test
EPC qualification procedure, calculation (incl. exclusions) and criteria in
Advanced monitoring the O&M contract
Basic monitoring
Advanced inspection
Visual inspection
Spare part management
Others
mitigation mitigations: ↑ ↑
As reflected in the LCOE technical risk flashcards, the mitigation measures could be grouped into
nine types. The first eight were defined in [2]. The last type (“Others”) has been added here to define
the mitigation measures not associated to any of the other categories, e.g. those which are related
to the guarantees in the engineering, procurement and constructions (EPC) or O&M contracting or
O&M service scope.
1. Component testing of important plant components such as PV modules or inverters. The testing
could be that which is done by the manufacturer in the factory, or independent testing at certified
laboratory, or on-site at the PV plant;
2. Design review and construction monitoring serves to catch issues caused by bad PV plant
conception and poor PV construction workmanship;
3. EPC qualification focuses on ensuring the competencies of the field workers, e.g., by requiring
certain technical qualification prerequisites or regular training of the field workers;
4. Implementing advanced monitoring system for early detection and diagnosis of faults;
5. Use of basic monitoring system to monitor plant level alarms and notifications1;
1
Although basic monitoring is pretty standard in commercial and large PV installations, it is not widely included in
residential systems and thus included here as a solution since our analysis will consider scenarios of basic monitoring
for residential home PV installations.

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6. Advanced inspection (e.g. using infrared or electroluminescence camera) to detect defects not
usually visible by naked eyes;
7. Visual inspection to establish any visible changes in PV plant components;
8. Spare part management to minimize the downtime and repair/substitutions;
9. Others which are mitigation measures associated with EPC or O&M contracting, or O&M service
scope.
These mitigation measures could have either positive or negative impact on the CAPEX, OPEX and
yield. For example, implementing component testing before construction would increase the PV plant
CAPEX (due to additional cost of testing) but decrease the OPEX (decreasing maintenance or repair
of defects already pre-screened), resulting in an increase in the overall plant yield.
For mitigation measures which will impact the PV plant yield, it is worth keeping in mind that the
impact may not be seen directly on the nominal value of the yield itself but on the uncertainties
surrounding the yield variation (this is denoted by ↓↑ or ↑↓ in the table below). The economic impact
in terms of uncertainty is discussed more in detail in [2].
The following table summarizes the impacts on LCOE of the mitigation measures for the 20 most
common gaps in the technical assumptions used in PV financial models identified in [1]. This
information is used for the sensitivity analysis in the next section of this chapter.
Table 1: LCOE technical risk categorization based on impact on CAPEX, OPEX and yield in PV financial models
Phase LCOE technical risk Risk impact on LCOE Mitigation impact on LCOE
CAPEX OPEX Yield CAPEX OPEX Yield
Procure 1. Insufficient EPC technical specifications to ↓ ↑
ment
ensure that selected components are
suitable for use in the specific PV plant
environment of application
Procure 2. Inadequate component testing to check for ↑ ↓ ↑ ↑
ment
product manufacturing deviations
Procure 3. Absence of adequate third party product ↑ ↓ ↑ ↑
ment
delivery acceptance test and criteria
Planning 4. Effect of long-term trends in the solar ↑↓ ↑ ↓↑
resource is not fully accounted for
Planning 5. Exceedance probabilities (e.g. P90) are ↑↓ ↑ ↓↑
/O&M
often calculated for risk assessment
assuming a normal distribution for all
elements contributing to the overall
uncertainty
Planning 6. Incorrect degradation rate and behavior ↓↑ ↑ ↑↓
over time assumed in the yield estimation
Planning 7. Using plant (instead of overall) availability ↑ ↑ ↓
to calculate the initial yield for project
investment financial model

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Phase LCOE technical risk Risk impact on LCOE Mitigation impact on LCOE
CAPEX OPEX Yield CAPEX OPEX Yield
Construc 8. Absence of standardized transportation and ↑ ↓ ↑ ↑
tion
handling protocol
Construc 9. Inadequate quality procedures in ↑ ↓ ↑ ↑
tion
component un-packaging and handling
during construction by workers
Construc 10. Missing construction monitoring during ↑ ↓ ↑ ↑
tion
construction
Construc 11. Inadequate protocol or equipment for plant ↑ ↓ ↑ ↑
tion
acceptance visual inspection
Construc 12. Missing short-term performance (e.g. PR) ↑ ↓ ↑ ↑
tion
check at provisional acceptance test,
including proper correction for
temperature and other losses
Construc 13. Missing final performance check and ↑ ↓ ↑ ↑
tion
guaranteed performance
Construc 14. At provisional commissioning, incorrect or ↓↑ ↑↓
tion
missing specification for collecting data for
PR or availability evaluations: incorrect
measurement sensor specification,
incorrect irradiance threshold to define
time window of PV operation for
PR/availability calculation
O&M 15. Standard monitoring system not capable of ↑ ↓ ↑ ↑ ↑
advanced fault detection and identification
O&M 16. Visual inspection during preventive ↑ ↓ ↑ ↑
maintenance not capable to catch defects
or faults not visible by naked eyes
O&M 17. Missing guaranteed key performance ↓ ↓ ↑ ↑
indicators (PR, availability or energy yield)
in O&M
O&M 18. In operational phase, incorrect or missing ↓↑ ↑↓
specification for collecting data for PR or
availability evaluations: incorrect
measurement sensor specification,
incorrect irradiance threshold to define
time window of PV operation for
PR/availability calculation
O&M 19. Missing or inadequate maintenance of the ↓ ↓↑ ↑ ↑↓
monitoring system
O&M 20. Module cleaning missing or frequency too ↑ ↓ ↑ ↑
low

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2.2 Sensitivity Analysis – Different Scenarios
The dependence of the PV LCOE on CAPEX, OPEX and yield is analyzed in this section through a
sensitivity analysis for different scenarios. Different case studies combining diverse mitigation
measures are explored. The first eight types of mitigation measures defined in §2.1 are considered.
In addition, three different market segments are analyzed: residential systems up to 5 kWp,
commercial rooftop systems <1 MWp, and utility ground-mounted systems ≥1 MWp.
2.2.1 LCOE calculation and input data

As introduced in [1], for the purpose of the works in the Solar Bankability project, the consortium
together with the project advisory board have agreed to exclude the inflation rate and tax in our
analyses as these values are not only country but also investors’ specific risk return preferences
dependent. Therefore, the PV LCOE in our sensitivity analysis is calculated as follows:
−
+ ∑
(1 + )
= (1)
. (1 − )
∑
(1 + )
where
N = PV system life [years]
CAPEX = total initial investment (CAPEX) [€/kWp]
OPEX = annual operation and maintenance expenditures (OPEX) [€/kWp]
RV = residual value [€/kWp]
r = discount rate [%]
Y0 = initial yield [kWh]

D = system degradation rate [%]
For all LCOE calculations in this report, a linear system degradation rate is assumed. Discount rate
values for different scenarios (countries) are extracted from [4]. Moreover, no residual value is
accounted for in the calculations.
2.2.2 Sensitivity of LCOE to input parameters

In the LCOE sensitivity analysis, we analyzed three scenarios of CAPEX and OPEX values in 2015-
2016 timeframe. We have based the CAPEX and OPEX prices in our analysis on information from
multiple sources, i.e. the project partners and project advisory board as well as recent publications
on PV system pricings. Table 2 below summarizes the values used in our analysis of the three
scenarios.

18
Table 2: Input parameters used in the LCOE sensitivity analysis for different scenarios
Input parameter Low Medium High

scenario scenario scenario
CAPEX [€/kWp]
Ground-mounted utility (≥ 1 MWp) € 900 € 1000 € 1200
Commercial rooftop (< 1 MWp) € 1000 € 1200 € 1400
Residential (up to 5 kWp) (VAT excluded) € 1300 € 1400 € 1600
OPEX [€/kWp/year]
Ground-mounted utility (≥ 1 MWp) € 13 € 15 € 20
Commercial rooftop (< 1 MWp) € 10 € 10 € 18
Residential (up to 5 kWp) (VAT excluded) €5 €5 €9
Performance Ratio ‘PR’ [%]
Ground-mounted utility (≥ 1 MWp) 86% 84% 86%
Commercial rooftop (< 1 MWp) 84% 82% 84%
Residential (up to 5 kWp) 82% 80% 82%
Plane-of-array (POA) irradiation [kWh/m2] 1331 1821 1168
Discount rate [%] 4% 8% 6.5%
Degradation rate [%] 0.5% linear
Lifetime [years] 25 years
The low, medium and high level designation is associated with CAPEX and OPEX values among
the scenarios analyzed. For the low scenario, the CAPEX range is set between 0.9 and 1.3 €/Wp
and the OPEX ranges between 5 and 13 €/MWp/year, depending on the market segment. For this
scenario, we have simulated the LCOE for a PV system in a location with an optimal plane-of-array
irradiation comparatively in the mid-range among countries in EU (e.g. 1331 kWh/m2 for Munich,
Germany). For discount rate, 4% is assumed. Additional information on the components behind the
calculation of this discount rate can be found in [4]. This scenario could be considered representing
PV systems in mature markets such as Germany where high competition has driven the CAPEX and
OPEX prices down and the market is less risky.
For the medium scenario, the CAPEX is set between 1 and 1.4 €/W. The OPEX is similar to the low
scenario. The irradiation level is set quite high, 1821 kWh/m2, to simulate PV systems in locations
with lots of sunlight. The discount rate is assumed to be quite high (8%) thus the PV system in this
scenario could be considered similar to those in countries such as Italy (in fact, the irradiation value
is for the city of Rome).
In the last scenario (high) we have selected a PV system with the highest CAPEX and OPEX among
the three cases. This scenario is selected to represent PV systems in countries such as UK or the
Netherlands where the irradiation level is low and the discount rate is in between the other two cases.
The irradiation value for Bristol has been used here.

19
In the sensitivity analysis, we varied the six parameters which have influences on the LCOE reflected
in Table 2 above, namely the CAPEX, OPEX, yield (using PR or irradiation), discount rate, yearly
degradation and system lifetime. Each of these inputs is varied by ±20%. For simplicity, we have
treated each input as if one is independent from the others. The full results of the LCOE sensitivity
analysis for the three different reference scenarios in three market segments are shown in Figure 4.
Figure 3 shows the results for the high scenario for a ground-mounted PV system (extracted from
Figure 4). The horizontal axis on the chart indicates the percentage change of the six input variables
when they are varied from -20% to +20%. The midpoint at 0% represents the nominal values given
in Table 2 above; the resulting LCOE in this specific case is 12.4 eurocents/kWh. The charts show
a strong dependency of the PV LCOE on the yield and investment expenditures. As the PV system
yield increases, the LCOE goes down drastically. On the other hand, LCOE increases as the CAPEX
becomes higher. OPEX appears to have much less impact than CAPEX on the LCOE value; this is
in agreement with the findings in our previous work [1] that CAPEX makes up the majority portion of
the PV lifecycle costs. By extending the lifetime of the PV system, the LCOE will decrease as the
costs are amortized over a longer period of time.
Figure 3: LCOE analysis for “high” scenario for ground-mounted utility system

20
Low scenario Medium scenario High scenario
Ground-mounted utility systems (≥ 1 MWp)
Commercial rooftop systems (< 1 MWp)
Residential systems (up to 5 kWp)
Figure 4: LCOE analysis - impact of ±20% independent variation of different input parameters for different scenarios

21
The resulting LCOE for the different scenarios and the three market segments from our analysis are
summarized in Table 3 below. In the best case, the electricity could be produced at ca. 5.5 to
8 eurocents/kWh.
Table 3: LCOE for different scenarios and market segments without any mitigation
Market segment Low Medium High

LCOE without any mitigation [€cents/kWh] [€cents/kWh] [€cents/kWh]
Ground-mounted utility (≥ 1 MWp) 5.4 – 8.1 6.2 – 9.3 10.3 – 15.5

Commercial rooftop (< 1 MWp) 5.8 – 8.7 7.0 – 10.7 11.8 – 17.8
Residential (up to 5 kWp) 6.9 – 10.6 7.9 – 12.2 12.5 – 19.2
Results of the sensitivity analysis show that for a variation range of ±20%, the variation in yield has
the highest impact in LCOE, followed by the variation in CAPEX, lifetime, discount rate, OPEX and
finally the degradation. These observations are true only for the low scenario (Figure 5). However,
for the medium and the high scenarios, the discount rate impact surpasses that of the lifetime, taking
the third place in the classification. This is clearly visible especially for the medium scenario mainly
because in the medium scenario, the discount rate was set to be quite high (8%) compared to the
other two scenarios. It is worth keeping in mind that a variation larger than ±20% may change the
order of some elements. For example, a larger variation of the discount rate may result in a different
sorting than the one presented in Figure 5.
Figure 5: Classification of input parameters according to their impact on LCOE for a variation of ±20% of each input parameter

22
In this analysis, the degradation is assumed to have a linear behavior over time and the effect of
different degradation behavior over time is out of the scope of this analysis. This topic has been
visited in a recent study [5] which has analyzed the effect on LCOE of four different degradation
trends, i.e. linear degradation of 0.5%/year, 2-step degradation, exponential degradation, and
0.16%/year degradation starting at 90% of nameplate power. The authors reported that overall, the
range of different degradation behaviors can be in the order of magnitude of 1.7 eurocents/kWh,
which in the case of that study was even exceeding the impact of the initial costs.
Another recently published study ([6]) assessed the effect of the different CAPEX, OPEX and yield
elements on the final LCOE. The results showed that within the CAPEX elements, the inverter costs
and the construction/installation works have the greatest influence on the LCOE. In the past solar
module cost used to be the dominant factor in PV capital investment but aggressive competitions
among manufacturers have helped lowering the module pricing significantly in recent years. For the
OPEX, the costs of preventive maintenance and the inverter warranty extension play the biggest
role. From the yield perspective, temperature losses and inverter losses are the most influencing
elements impacting the LCOE.
In the next section, we discuss the effect of mitigation measures on the different elements of the
LCOE.
2.2.3 Effect of risk mitigation measures on LCOE

The considered costs for the first eight mitigation measures described in §2.1 are shown in Table 4
(medium cost scenario in [2]). As the last mitigation measure (“Others”) does not have concrete and
quantifiable cost, the sensitivity analysis will be addressed differently in one of the case studies in
the next section §2.2.4. It is worth mentioning that although many of the mitigation measures are not
practical from cost and usefulness perspectives for residential PV systems, we have nevertheless
considered this market segment in our analysis for comparison purpose.
Table 4: Cost of mitigation measures for the medium cost scenario as defined in [2]
Mitigation measure Cost of Mitigation Measure (MM)

Component testing – PV modules 3 €/kWp
(0.15 €/kWp/year)
Design review + construction monitoring 20.00 €/kWp
(1 €/kWp/year)
EPC qualification € 3.00 €/kWp
(0.15 €/kWp/year)
Advanced monitoring 2.00 €/kWp/year
Basic monitoring 0.50 €/kWp/year
Advanced inspection 2.00 €/kWp/year
Visual inspection 1.00 €/kWp/year
Spare part management 0.50 €/kWp/year

23
Component testing, design review and construction monitoring, and EPC qualification are mitigation
measures which can be implemented during the early phases of PV project lifecycle, i.e. before the
PV system is commissioned into operation. The costs to implement these measures are therefore
considered as investment capitals. The remaining five mitigation measures in Table 4 are more of
operational costs.
To analyze the impact of the implementing risk mitigations on LCOE, different combinations of the
mitigation measures are analyzed. In total of 255 combinations of the eight above measures are
considered (cf. Annex 3 of [2]). How the application of each of these 255 combinations changes the
LCOE value is analyzed. The impact on the criticality of PV technical risks (i.e. Cost Priority Number)
was studied in another analysis and reported in [2].
For the purpose of this analysis we have assumed a hypothetical PV plant in all cases where there
is a ~7% performance loss without any mitigation measure applied. This 7% loss and the impact of
the different combinations of mitigation measures on this loss comes from the statistical analysis
over a portfolio of 440 MWp presented in [2] (failures in the never detected scenario). Examples of
specific cases where the losses can potentially be much higher are presented in §2.2.4.
How mitigation measures change the LCOE?
Figure 6 shows the resulting relative change in LCOE for the ground-mounted PV systems in the
utility market segment under the low scenario defined in the previous section. Each point on the
chart represents one possible mitigation measure combination. The analysis is done for the loss
scenario2 where plant performance loss is observed due to the occurrence of non-catastrophic faults
and the faults are not fixed. We have also chosen the low PPA case of 10 eurocents/kWh [2].Thus,
the relative change in LCOE is calculated using the reference cost priority number (CPN) value of
5.4 €/kWp/year.
Results presented in Figure 6 indicate that specific for ground-mounted PV systems under the low
scenario, most of the mitigation combinations under this scenario yield in average a reduction of
LCOE in the order of 1% to 2%. However, there are some few mitigation combinations that actually
could lead to an undesirable increase of the LCOE. On the other hand, there are some mitigation
combinations that may potentially decrease the LCOE by as much as 4%.
2
The fix scenario defined in [2] is not used in this analysis as it represents an extreme case where the costs related to
fixing all failures (i.e. reference CPN value of 104.75 €/kWp/year) would be by far much higher than the OPEX in any
of the scenarios analyzed in this report.

24
Figure 6: Relative change in LCOE for mitigation measure combinations under the “low” scenario for ground-mounted utility PV
system
For an easier visualization of the potential reduction of LCOE through combination of different
mitigation measures for the low scenario, Figure 7 presents the same results as Figure 6 but sorted
according to the impact on the LCOE. This approach allows to rank the magnitude of the impact on
LCOE of not only individual mitigation measures but also their combinations.
The orange line in Figure 7 (primary vertical axis) shows the relative change in the LCOE (%)
resulting from the application of the different 255 combinations of mitigation measures. Each
combination has a related CAPEX and/or OPEX cost, indicated by the blue and green areas on the
chart (secondary vertical axis). Moreover, the application of the mitigation measures may have an
impact in reducing the energy loss associated with the technical risks (red line in the figure –
secondary vertical axis). We can draw the following observations from this analysis:
• For most of the analyzed combinations of mitigation measures, an average LCOE decrease of 1
to 2% is observed. The decline in LCOE is somehow correlated with a smaller increase of OPEX
due to the application of mitigation measures.
• There are several combinations of mitigation measures that actually increase the LCOE.
Mitigation measures with large combined increases in CAPEX and OPEX result in higher
increase in LCOE.
• The best combinations of mitigation measures for this scenario could potentially decrease the
LCOE by as much as 4%. The two best combinations in this scenario are:
o Combination #48: qualification of EPC (+0.25% CAPEX) and advanced monitoring

system (+13.3% OPEX), and
o Combination #176: component testing and qualification of EPC (+0.5 % CAPEX) and
advanced monitoring system (+13.3% OPEX).

25
Figure 7: Sorted relative change in LCOE for 255 mitigation measure combinations for ground-mounted utility system for “low”
scenario
Similar analysis was repeated for the medium and high scenario for the same market segments. The
plots are presented in Figure 8 and Figure 9 below. As the figures show, the higher CAPEX, OPEX
and/or discount rate in these two scenarios results in higher LCOE. Moreover, the different
combinations of mitigation measures will have a larger impact in lowering the LCOE.
Figure 8: Sorted relative change in LCOE for 255 mitigation measure combinations for ground-mounted utility system for “medium”
scenario

26
Figure 9: Sorted relative change in LCOE for 255 mitigation measure combinations for ground-mounted utility system for “high”
scenario
The analysis on different combinations of mitigation measures on LCOE was replicated for the
commercial rooftop and residential PV systems. As mentioned before, although many of the
mitigation measures are not practical from cost and usefulness perspectives for residential PV
systems, we have nevertheless considered this market segment in our analysis for comparison
purpose. The resulting best case mitigation combinations for all three market segments are
summarized in Table 5 below.
Table 5: Maximum LCOE reduction and LCOE after the application of the best combination of mitigation measures
Market segment Low Medium High

% maximum LCOE reduction
Ground-mounted utility (≥ 1 MWp) 3.6% 3.8% 4.2%
Commercial rooftop (< 1 MWp) 4.6% 4.8% 5.0%
Residential (up to 5 kWp) 4.8% 5.0% 5.1%
LCOE after best mitigation combination [€cents/kWh] [€cents/kWh] [€cents/kWh]
Ground-mounted utility (≥ 1 MWp) 5.2 – 7.8 5.9 – 8.9 9.9 – 14.8

Commercial rooftop (< 1 MWp) 5.5 – 8.4 6.7 – 10.3 11.2 – 17.0
Residential (up to 5 kWp) 6.6 – 10.1 7.5 – 11.6 11.9 – 18.2
In general, a reduction in the LCOE in the order of 4 to 5% was observed in all cases. The results
continue to highlight that mitigation measures with most positive impacts in LCOE reduction are the

27
ones implemented in early phase of project development (EPC qualification, component testing, and
using advanced monitoring system).
The impact is less if the system size increase because the lifecycle costs are generally lower than
those for the residential systems and thus, relative decrease in LCOE is less significant. More
importantly, results show that the different combinations of mitigation measures have a larger impact
in lowering the LCOE for scenarios where the higher CAPEX, OPEX, and/or discount rate results in
a higher LCOE.
Which mitigation measures are most effective from LCOE perspective?
Our LCOE analysis includes three scenarios in three market segments and thus there are in total
nine different cases considered. Here we analyze which combinations, among the 255 studied, of
mitigation measure are most effective to reduce the LCOE. The top 10 most effective mitigation
combinations from LCOE perspective for all nine cases are extracted and summarized in Figure 10
below. For detail lists of 10 most effective mitigation measure combinations for each of the nine
different cases, refer to Annex B of this report.
In Figure 10, each individual plot represents one LCOE reduction ranking. On the x-axis of each plot
is the number (index) representing each mitigation combination. On the y-axis on each plot is the
number of cases (the count) a certain mitigation combination works. For example, for the most
effective mitigation combination plot (“Rank = 1”), mitigation combination #48 has a count of 9 which
means it is the most effective combination to lower the LCOE across three market segments under
all three scenarios.

28
10 Most Effective Mitigation Measure Combinations to Reduce LCOE
Rank = 1 Rank = 2 Rank = 3
10
9
8
7 MitigationIndex
6
5 16
4
3 48
2
1 144
0 176
Rank = 4 Rank = 5 Rank = 6 56
10
9 49
8
7 184
6
5 18
4
3 42
2
Count
1 177
0
50
10
Rank = 7 Rank = 8 Rank = 9 170
9
8 10
7
6 40
5
4 Other
3
2
1
0
16
48
144
176
56
49
184
18
42
177
50
170
10
40
16
48
144
176
56
49
184
18
42
177
50
170
10
40
Other
Other
Rank = 10
10
9
8
7
6
5
4
3
2
1
0
16
48
144
176
56
49
184
18
42
177
50
170
10
40
Other
Mitigation Index (Mitigation Measure Combination #)
Figure 10: Top 10 most effective mitigation measure combinations for LCOE reduction
It is apparent from the figure above that there is only a dozen or so mitigation combinations which
are most effective in reducing PV LCOE across all three market segments for all three scenarios.
Moreover, the top three most effective combinations appear to involve mitigation measures which
are to be implemented in the early phase of project lifecycle:
• #48: EPC qualification + advanced monitoring system;
• #176: component testing + EPC qualification + advanced monitoring system;
• #16: advanced monitoring.
2.2.4 Case studies

In the previous sections we have analyzed the impact of multiple risk and risk mitigation
combinations on LCOE for different PV market segments on three scenarios. In this subsection we
present three different more specific case studies where PV systems with specific issues are
considered. The LCOE range is the result of the variation of ±20% of the input parameters as defined
in §2.2.2. We have used the principal behind the risk flashcard introduced earlier in this report to
illustrate how the risk flashcards can be used.

29
Case study 1: Cost benefit of design review during design phase
Phase of risk occurrence
LCOE Under-estimation of the long-term yield of a PV plant Procurement Planning

Technical during the design phase
Risks (Risk #4 and Risk #6 in Table 1)
O&M Construction
Key Even with an implementation of mitigation measure which increases the CAPEX, the
takeaway overall LCOE decreases as the gain in yield surpasses the extra CAPEX cost.
Plant info Ground-mounted utility PV system with crystalline silicon PV modules
Risk info • 5% under-estimation of the solar resource due to unaccounted long-term solar
resource trends.
• 0.7% degradation rate was assumed while the manufacturer guarantees annual
degradation of 0.5%.
Impact of Overall LCOE CAPEX OPEX Yield

risk Over-estimated ↓
Mitigations Component The cost of design review in project due diligence is assumed to be
testing ca. 0.5 €/kWp (CAPEX).
Design review + A reduction in the order of 6.5%, 6.2% and 6.4% in LCOE can be
construction achieved for the low, medium and high scenarios respectively by
monitoring
implementing best practices during design review as a mitigation
EPC qualification measure.
Advanced
monitoring
Basic monitoring
Advanced
inspection
Visual inspection
Spare part
management
Others
Figure 11: Impact of design review on LCOE – case study 1

mitigation Decreases ↑ ↑

30
Case study 2: Cost benefit of implementing PV module power rating verification pre-
installation
LCOE Procurement Planning

Module power below contracted value
Technical
Risks (Risk #2 in Table 1)
O&M Construction
Key Even with an implementation of mitigation measure which increases the CAPEX, the
takeaway overall LCOE decreases as the gain in yield surpasses the extra CAPEX cost.
Risk info • 1.2% of the delivered modules are below contracted power which translates into an
overall decrease in initial plant performance ratio of roughly 1%.
• Under-performing modules are replaced at 120 €/unit (OPEX).

risk Over-estimated ↑ ↓
Mitigations Component The cost of PV module testing prior to installation is assumed to be

testing ca. 0.5 €/kWp (CAPEX).
Design review + A reduction in the order of 6.8%, 5.2% and 4.8% in LCOE can be
monitoring implementing PV module STC testing prior to installation as a
mitigation measure.
EPC qualification
Advanced
monitoring
Basic monitoring
Advanced
inspection
Visual inspection
Spare part
management
Others
Figure 12: Impact of module testing prior to installation on LCOE – case study 2


31
Case study 3: Cost benefit of PV module cleaning to reduce soiling loss
LCOE Procurement Planning

Missing module cleaning
Technical
Risks (Risk #20 in Table 1)
O&M Construction
Key Even with an implementation of mitigation measure which increases the OPEX, the
takeaway overall LCOE decreases as the gain in yield surpasses the extra OPEX cost.
Risk info • No module cleaning is planned in the maintenance schedule.

• 7% of soiling losses due to high pollution region and low yearly rainfall.

risk Over-estimated ↓
Mitigations Component The cost of PV module cleaning is assumed to be ca. 1 €/kWp/year

testing (OPEX).
Design review + A reduction in the order of 7%, 7.2% and 7.4% in LCOE can be
monitoring implementing PV module cleaning as a mitigation measure.
EPC qualification
Advanced
monitoring
Basic monitoring
Advanced
inspection
Visual inspection
Spare part
management
Others
Figure 13: Impact of module cleaning on LCOE – case study 3


32
2.3 Chapter Summary
In this chapter we analyzed how PV LCOE is influenced by the technical risks associated with the
20 most common gaps in the technical assumptions in PV financial models. A sensitivity analysis
was performed by varying 6 input parameters of the LCOE (CAPEX, OPEX, yield, discount rate,
yearly degradation and system lifetime) by ±20%. The CAPEX and OPEX prices used in the analysis
are inputs from our project partners, project advisory board and recent publications on PV system
pricings. In the sensitivity analysis, each input was treated as if one is independent from the others.
The analysis includes three different market segments: residential systems <5 kWp, commercial
rooftop systems <1 MWp, and utility scale ground-mounted systems ≥1 MWp. For each market
segment, three scenarios representing PV systems in three countries in EU where LCOE is low,
medium and high were evaluated.
The LCOE sensitivity analysis results highlight that the variation in yield has the
highest impact in LCOE, followed by the variation in CAPEX, lifetime or discount rate,
OPEX, and finally the degradation.
The impact of the technical risk mitigations on LCOE was then evaluated. Eight mitigation measures
have been proposed to address the LCOE technical risks identified in the works. Three of these are
component testing, design review and construction monitoring, and EPC qualification which can be
implemented during the early phases of PV project lifecycle. The other five – basic monitoring,
advanced monitoring, visual inspection, advanced inspection, and spare part management, are
mitigation measures during the operational phase of the PV system. We simulated 255 different
combinations of these eight mitigation measures and calculated the corresponding LCOE values.
The analysis was performed for the three market segments and three scenarios used in the above
LCOE sensitivity analysis. The results show the followings:
In general, an LCOE reduction up to 4 to 5% is observed in all cases.
The different combinations of mitigation measures have a larger impact in lowering
the LCOE for scenarios where the higher CAPEX, OPEX, and/or discount rate results
in a higher LCOE.
Mitigation measures which are most effective in lowering PV LCOE are similar across
all three market segments and all scenarios.
The three mitigation measures most effective in lowering LCOE are those implemented
at the early stage of project lifecycle: qualification of EPC, component testing prior to
installation, and advanced monitoring system for early fault detection.
Finally, we presented 3 case studies where PV systems with specific issues are considered: one
case where poor yield estimation method was used in the design phase; the second case involves
low module power output in the procurement phase, and the last case where module cleaning was
not included in the operational phase. The LCOE’s before and after the application of mitigation
measures were calculated.
In all three cases the results highlight that even though the implementation of
mitigation measures increases either CAPEX or OPEX or both, the overall LCOE after
mitigation decreases as the gain in yield surpasses the extra incurred cost.

33
3 Best Practice Guidelines
The analyses done in the preceding chapter on the impacts of the LCOE technical risks and their
associated mitigations on the PV investment cost have highlighted that PV LCOE cost is sensitive
to the changes in the CAPEX, lifetime or discount rate, OPEX, and finally the degradation. Moreover,
from our previous works on gaps analysis in the technical assumptions used in PV cost calculations,
we have identified gaps in the EPC and O&M activities which ultimately could have negative
influences on the project CAPEX, OPEX and yield. It is therefore essential to ensure that the activities
revolving around the EPC and O&M phases of the PV system are executed in manners which will
minimize the occurrence or impact of the LCOE technical risks. In this regards, a set of best practice
guidelines for the technical aspects in the EPC and O&M contracts have been developed to serve
different actors along the PV project value chain in the process of realizing and operating PV plants.
In total six checklists have been developed based on inputs from the project partners and published
references [7]–[11]. Each checklist could be used as a stand-alone document. The three main
checklists are:
1. Best Practice Checklist for EPC Technical Aspects
2. Best Practice Checklist for O&M Technical Aspects

3. Best Practice Checklist for Long-Term Yield Assessment
The three supplementary checklists are:
4. Checklist for As-Build Documents – Type and Details

5. Checklist for Record Control
6. Checklist for Reporting Indicators
The above checklists have been developed for use for utility-scale (ground-mounted) and
commercial rooftop PV installations. The checklists for residential systems are treated separately
since they are based on very different business models; these checklists are presented in another
report of the Solar Bankability project (Technical Bankability Guidelines - Recommendations to
Enhance Technical Quality of PV Investments [3]).

34
4 Closing Remarks
In this report, we have presented the results of various analyses on how PV technical risks and the
associated risk mitigation measures could impact the PV levelized cost of electricity. This is important
as PV LCOE is an important factor influencing the investment-attractiveness of a PV project. The
results from the works provide a valuable insight on how to link more concretely the PV investment
financial side and the PV technical side. One straightforward way is to manage the technical risks in
PV investment via best practices in EPC and O&M technical aspects, and in the methodology to
estimate and calculate PV system yield.
In this regard, we have therefore developed a set of best practice guidelines in the form of checklists
for different actors in the PV value chain. The main three checklists are for best practices to set up
EPC contracting, O&M contracting, and yield calculation/estimation. The three other checklists
compliment the EPC and O&M contracting best practices. Each checklist could be used as a stand-
alone document.
In addition, a set of flash cards for the 20 most common technical risks associated with the gaps in
technical assumptions to calculate PV LCOE have been created to serve as quick references for the
users.
We would like to note that the best practice checklists presented in this report are best suited for use
for utility-scale (ground-mounted) and commercial rooftop PV installations. The residential systems
are based on different business models and thus the best practice guidelines are addressed in
another work of this project [3].
Last but not least, in the LCOE sensitivity analysis and case studies, we have used inputs (for
CAPEX, OPEX, yield, discount rate, yearly degradation, and system lifetime) provided by project
partners and advisory board as well as recent publications on PV system pricings. These values are
from recent years (2015-2016) and will change over time as the PV market continues to evolve.
Consequently, we recommend repeating the analysis once new input numbers become available.

35
References
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for Minimizing Technical Risks of PV Project Development and PV Plant Operation,” Solar
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American Bar Association, 2008.

36
Annex A – Top 20 LCOE Technical Risks
and Mitigation Measure
This annex details the categorization of the most common PV technical risks we have identified with
respect to their impacts and their mitigations on PV LCOE. We have included the recommended
mitigations as well as the key takeaway for each of these risks. The categorization method is
explained in §2.1 of this report.
LCOE Technical 1. Insufficient EPC technical specifications to ensure Phase of risk occurrence
Risk that selected components are suitable for use in the Procurement Planning
specific PV plant environment of application
O&M Construction
Key takeaway PV plant component specification and requirement in the EPC contract should be as detailed as
possible to ensure that the components procured are suited for the intended PV installation,
specific application, site and environment
CAPEX OPEX Yield
↓
Mitigations Component testing When specifying the technical requirements for PV plant
Design review + components in the EPC contract, in addition to the
construction monitoring component type and quantity, the specifications should also
EPC qualification include:
Advanced monitoring • All applicable certifications and conformances (e.g.
Basic monitoring IEC61215, IEC61730, IEC61701, IEC62804, IEC61716 for
Advanced inspection modules; IEC62109, IEC61000 for inverters; CE mark of
Visual inspection compliance for all electrical components)
Spare part management • The environmental condition the components will be
Others installed in (temperature, humidity, wind and snow load,
any special chemical exposure, corrosion risk etc.)
• For PV modules, module component bill of materials and
the proof of IEC certification documents for these
materials
mitigation mitigations: ↑

37
LCOE Technical 2. Inadequate component testing to check for Phase of risk occurrence
Risk product manufacturing deviations Procurement Planning
O&M Construction
Key takeaway Comprehensive relevant product testing in the manufacturer’s factory should be included as an
EPC requirement to minimize issues due to product defects caused by manufacturing deviations
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing For critical PV plant components such as modules or
Design review + inverters, the following product quality control must be
construction monitoring included as part of procurement process required from the
EPC qualification EPC contractor:
Advanced monitoring • Reviewing how the products are tested by the
Basic monitoring manufacturer in the factory (including checking the
Advanced inspection pass/fail criteria for the tests)
Visual inspection • Requesting specific tests to be included in the product
Spare part management test plan in the factory
Others • Reviewing the factory test results at the latest upon
delivery
LCOE Technical 3. Absence of adequate third party product Phase of risk occurrence
Risk delivery acceptance test and criteria Procurement Planning
O&M Construction
Key takeaway Plant components such as PV modules should only be accepted for PV project installation when
independent testing shows that they have met the contracted technical specifications
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing For critical PV plant components such as modules or
Design review + inverters, the following product quality control must be
construction monitoring included as part of procurement process required from the
EPC qualification EPC contractor:
Advanced monitoring • Have a sample group of product shipment tested by an
Basic monitoring independent trustworthy party if they perform according
Advanced inspection to the contracted requirements
Visual inspection • Clearly define the tests and acceptance criteria prior to
Spare part management testing
Others • Accept only the product shipment if the test results
indicate the product meets the contracted requirements

38
LCOE Technical 4. Effect of long-term trends in the solar resource is Phase of risk occurrence
Risk not fully accounted for Procurement Planning
O&M Construction
Key takeaway Not counting the long-term trend in solar irradiation could result in under-estimation of PV plant
yield and over-estimation of the annual variability in risk assessment
CAPEX OPEX Yield
↑↓
Mitigations Component testing In a long-term yield estimation:
Design review + • Analyze long-term solar resource databases (ideally more
construction monitoring than 20 years) for the presence of long-term trends
EPC qualification • In the presence of long-term trends, use methods
Advanced monitoring described in best practices to account for the effect of
Basic monitoring these trends in the solar resource
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↓↑
LCOE Technical 5. Exceedance probabilities (e.g. P90) are often Phase of risk occurrence
Risk calculated for risk assessment assuming a Procurement Planning
normal distribution for all elements contributing
to the overall uncertainty O&M Construction
Key takeaway Assuming a normal distribution for all elements in the calculation of exceedance probabilities
may result in misleading risk assessment studies
CAPEX OPEX Yield
↑↓
Mitigations Component testing • In a long-term yield estimation, calculate exceedance
Design review + probabilities (e.g. P90) using empirical method based on
construction monitoring available data instead of simply assuming normal
EPC qualification distribution
Advanced monitoring
Basic monitoring
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↓↑

39
LCOE Technical 6. Incorrect degradation rate and behavior over Phase of risk occurrence
Risk time assumed in the yield estimation Procurement Planning
O&M Construction
Key takeaway Incorrect assumption of degradation rate and behavior over time could have significant impact
on the cash flow and exceedance probabilities in risk assessment
CAPEX OPEX Yield
↓↑
Mitigations Component testing • Take into account the degradation rate and behavior
Design review + when estimating the long-term yield; these assumptions
construction monitoring should be backed up by guaranteed values offered by
EPC qualification the module manufacturers or validated independently
Advanced monitoring • O&M operator should use guaranteed degradation
Basic monitoring values to derive the yearly performance ratio
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↑↓
LCOE Technical 7. Using plant (instead of overall) availability to Phase of risk occurrence
Risk calculate the initial yield for project investment Procurement Planning
financial model
O&M Construction
Key takeaway Incorrect optimistic assumption of PV plant availability in long-term yield estimation could have
a significant impact on the cash flow of the project
CAPEX OPEX Yield
↑
Mitigations Component testing • Use overall availability (which includes downtime beyond
Design review + the O&M), and not the plant availability guaranteed by
construction monitoring the O&M operator) to calculate the initial yield for
EPC qualification project investment financial model and PV LCOE
Advanced monitoring
Basic monitoring
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↓

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LCOE Technical 8. Absence of standardized transportation and Phase of risk occurrence
Risk handling protocol Procurement Planning
O&M Construction
Key takeaway Transportation method should ensure that the PV plant components arrive undamaged to the
project site
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Require the description of the transportation method to
Design review + be included in the EPC contract
construction monitoring • Audit the loading and unloading important PV plant
EPC qualification components
Advanced monitoring • Implementing visual inspection on components upon
Basic monitoring deliver; for PV modules, the inspection should include
Advanced inspection electroluminescence scan to check for micro-cracks in
Visual inspection solar cell due to module mishandlings
Spare part management • Taking a transportation insurance
Others
LCOE Technical 9. Inadequate quality procedures in component un- Phase of risk occurrence
Risk packaging and handling during construction by Procurement Planning
workers
O&M Construction
Key takeaway The EPC field workers should be aware of and execute special care and handling of PV plant
components
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Inspect construction work quality by carrying out
Design review + construction monitoring site visits. This can be done
construction monitoring through the assistance of a technical advisor. Ideally
EPC qualification construction monitoring should be included in the EPC
Advanced monitoring contract
Basic monitoring • Training of field workers on how to correctly store PV
Advanced inspection plant component before installation
Visual inspection • Training of field workers on any special unpacking
Spare part management protocol and how to carry e.g., PV modules from the
Others unpacking point to the installation place

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LCOE Technical 10. Missing construction monitoring during Phase of risk occurrence
Risk construction Procurement Planning
O&M Construction
Key takeaway Good workmanship of the EPC field workers is key to constructing a good quality PV plant
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Perform construction monitoring / site visits to monitor
Design review + and audit construction progress and work quality. This
construction monitoring can be done through the assistance of a technical
EPC qualification advisor. Ideally construction monitoring should be
Advanced monitoring included in the EPC contract
Basic monitoring • Training of field workers on the correct procedures to
Advanced inspection construct different parts of PV plant
Visual inspection
Others
LCOE Technical 11. Inadequate protocol or equipment for visual Phase of risk occurrence
Risk inspection during plant acceptance Procurement Planning
O&M Construction
Key takeaway Visual inspection during plant acceptance should include advanced tools such as IR
thermography to detect defects not visible by naked eyes
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Require advanced visual inspection tool such as IR
Design review + thermal camera or EL camera as part of the plant
construction monitoring completion/acceptance test
EPC qualification • Include the requirement for such inspection, the
Advanced monitoring protocol and acceptance criteria in the EPC contract
Basic monitoring
Advanced inspection
Visual inspection
Others

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LCOE Technical 12. Missing short-term performance (e.g. PR) check Phase of risk occurrence
Risk at provisional acceptance test, including proper Procurement Planning
correction for temperature and other losses
O&M Construction
Key takeaway Short-term performance test should be part of provisional plant acceptance and at least one
form of key performance indicator must be used to determine if the EPC contractor has delivered
PV plant which can operate without major issues
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Require the EPC contractor to include guarantee of plant
Design review + performance to be achieved as condition for provisional
construction monitoring acceptance. This can be either guaranteed PR or
EPC qualification guaranteed output measured over a short provisional
Advanced monitoring test period following construction completion and grid
Basic monitoring connection
Advanced inspection • Include all details of the performance test procedure,
Visual inspection calculation (incl. exclusions) and criteria in the EPC
Spare part management contract
Others
LCOE Technical 13. Missing final performance check and guaranteed Phase of risk occurrence
Risk performance Procurement Planning
O&M Construction
Key takeaway PV plant acceptance should include not only provisional but also final performance test after the
plant has been operational for representative period of time
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Require in the EPC contract that a guaranteed final plant
Design review + performance ought to be achieved before the plant is
construction monitoring completely accepted
EPC qualification • Include all details of the performance indicator, test
Advanced monitoring procedure, calculation (incl. exclusions) and criteria in
Basic monitoring the EPC contract
Advanced inspection
Visual inspection
Others

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LCOE Technical 14. At provisional commissioning, incorrect or Phase of risk occurrence
Risk missing specification for collecting data for PR or Procurement Planning
availability evaluations: incorrect measurement
sensor specification, incorrect irradiance O&M Construction
threshold to define time window of PV operation
for PR/availability calculation
Key takeaway Unreliable or incorrect plant operational data could lead to incorrect assessment PV plant
performance during plant acceptance phase
CAPEX OPEX Yield
↓↑
Mitigations Component testing • Specify in detail in the EPC contract, the plant
Design review + parameters to be measured and the equipment or
construction monitoring sensor required to measure them, and the data
EPC qualification acquisition time format
Advanced monitoring • Consider the seasonal effects of temperature and
Basic monitoring irradiance when evaluating plant performance and
Advanced inspection availability evaluation
Visual inspection • Ensure that the cut-off windows to the irradiance and
Spare part management time for data to be used in the performance calculation
Others are correctly set in order to not discount valid data or
include invalid data
mitigation mitigations: ↑↓
LCOE Technical 15. Standard monitoring system not capable of Phase of risk occurrence
Risk advanced fault detection and identification Procurement Planning
O&M Construction
Key takeaway Early fault detection could prevent defect propagation which could lead to PV plant outage
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Use smart monitoring system for PV plant operation
Design review + supervision and control
construction monitoring
EPC qualification
Advanced monitoring
Basic monitoring
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↑ ↑

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LCOE Technical 16. Visual inspection during preventive maintenance Phase of risk occurrence
Risk not capable to catch defects or faults not visible Procurement Planning
by naked eyes
O&M Construction
Key takeaway Defects not visible by naked eyes should be detected and rectified to prevent their impacts on PV
plant performance
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • Require advanced visual inspection tool such as IR
Design review + thermal camera or EL camera as part of the plant regular
construction monitoring maintenance inspection
EPC qualification • Include the requirement for such inspection, the
Advanced monitoring protocol and acceptance criteria in the O&M contract
Basic monitoring
Advanced inspection
Visual inspection
Others
LCOE Technical 17. Missing guaranteed key performance indicators Phase of risk occurrence
Risk (PR, availability or energy yield) in O&M Procurement Planning
contract
O&M Construction
Key takeaway Guaranteed performance indicator is important to ensure that the plant operation and
maintenance is carried out properly
CAPEX OPEX Yield
↓ ↓
Mitigations Component testing • Require the operator to guarantee plant performance or
Design review + availability which will be assessed on a yearly basis
construction monitoring • Include all details of the performance indicator, test
EPC qualification procedure, calculation (incl. exclusions) and criteria in
Advanced monitoring the O&M contract
Basic monitoring
Advanced inspection
Visual inspection
Others

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LCOE Technical 18. In operational phase, incorrect or missing Phase of risk occurrence
Risk specification for collecting data for PR or Procurement Planning
availability evaluations: incorrect measurement
sensor specification, incorrect irradiance O&M Construction
threshold to define time window of PV operation
for PR/availability calculation
Key takeaway Unreliable or incorrect plant operational data could lead to incorrect assessment PV plant
performance
CAPEX OPEX Yield
↓↑
Mitigations Component testing •Specify in detail in the O&M contract, the plant
Design review + parameters to be measured and the equipment or
construction monitoring sensor required to measure them, and the data
EPC qualification acquisition time format
Advanced monitoring • Consider the seasonal effects of temperature and
Basic monitoring irradiance when evaluating plant performance and
Advanced inspection availability evaluation
Visual inspection • Ensure that the cut-off windows to the irradiance and
Spare part management time for data to be used in the performance calculation
Others are correctly set in order to not discount valid data or
include invalid data
mitigation mitigations: ↑↓
LCOE Technical 19. Missing or inadequate maintenance of the Phase of risk occurrence
Risk monitoring system Procurement Planning
O&M Construction
Key takeaway Monitoring system functionality will affect the quality of the plant operational data.
Maintenance should specifically include the monitoring system
CAPEX OPEX Yield
↓ ↓↑
Mitigations Component testing • Include in the PV plant preventive maintenance activities
Design review + a regular maintenance of plant monitoring system
construction monitoring (functionality check, sensor calibration)
EPC qualification
Advanced monitoring
Basic monitoring
Advanced inspection
Visual inspection
Others
mitigation mitigations: ↑ ↑↓

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LCOE Technical 20. Module cleaning missing or frequency too low Phase of risk occurrence
Risk Procurement Planning
O&M Construction
Key takeaway PV module surface must be kept clean and free of obstacles to maintain maximum absorbed sun
light for electricity generation
CAPEX OPEX Yield
↑ ↓
Mitigations Component testing • The PV plant preventive maintenance activities should
Design review + include module cleaning as standard and the cleaning
construction monitoring frequency should be optimized to match the soiling rate
EPC qualification
Advanced monitoring
Basic monitoring
Advanced inspection
Visual inspection
Others

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Annex B – Top 10 Mitigation Measures
Combinations for Different Market
Segments and Scenarios
Ground-mounted utility scale PV system
Scenario Rank Mitigation CAPEX change OPEX change LCOE change
Measure Index
1 48 0.3% 15.4% -3.6%
2 176 0.7% 15.4% -3.5%
3 16 0.0% 15.4% -3.5%
4 42 0.3% 11.5% -3.4%
5 144 0.3% 15.4% -3.3%
Low
6 40 0.3% 3.8% -3.3%
7 170 0.7% 11.5% -3.3%
8 168 0.7% 3.8% -3.2%
9 10 0.0% 11.5% -3.1%
10 34 0.3% 7.7% -3.0%
1 48 0.3% 13.3% -3.8%
2 176 0.6% 13.3% -3.6%
3 16 0.0% 13.3% -3.6%
4 42 0.3% 10.0% -3.5%
5 144 0.3% 13.3% -3.5%
Medium
6 170 0.6% 10.0% -3.4%
7 40 0.3% 3.3% -3.4%
8 168 0.6% 3.3% -3.3%
9 10 0.0% 10.0% -3.2%
10 56 0.3% 16.7% -3.2%
1 48 0.3% 10.0% -4.2%
2 176 0.5% 10.0% -4.1%
3 16 0.0% 10.0% -4.0%
4 144 0.3% 10.0% -3.9%
5 42 0.3% 7.5% -3.9%
High
6 170 0.5% 7.5% -3.8%
7 56 0.3% 12.5% -3.7%
8 49 0.3% 12.5% -3.7%
9 184 0.5% 12.5% -3.6%
10 177 0.5% 12.5% -3.6%

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Commercial rooftop-mounted PV system
Measure Index
1 48 0.3% 20.0% -4.6%
2 176 0.6% 20.0% -4.5%
3 16 0.0% 20.0% -4.4%
4 144 0.3% 20.0% -4.3%
5 56 0.3% 25.0% -4.2%
Low
6 42 0.3% 15.0% -4.2%
7 49 0.3% 25.0% -4.2%
8 18 0.0% 30.0% -4.1%
9 184 0.6% 25.0% -4.0%
10 177 0.6% 25.0% -4.0%
1 48 0.3% 20.0% -4.8%
2 176 0.5% 20.0% -4.7%
3 16 0.0% 20.0% -4.6%
4 144 0.3% 20.0% -4.5%
5 56 0.3% 25.0% -4.5%
Medium
6 49 0.3% 25.0% -4.4%
7 18 0.0% 30.0% -4.4%
8 42 0.3% 15.0% -4.3%
9 184 0.5% 25.0% -4.3%
10 50 0.3% 30.0% -4.3%
1 48 0.2% 11.1% -5.0%
2 176 0.4% 11.1% -4.9%
3 16 0.0% 11.1% -4.8%
4 144 0.2% 11.1% -4.7%
5 56 0.2% 13.9% -4.7%
High
6 49 0.2% 13.9% -4.7%
7 18 0.0% 16.7% -4.6%
8 50 0.2% 16.7% -4.6%
9 184 0.4% 13.9% -4.6%
10 177 0.4% 13.9% -4.6%

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Residential PV system
Measure Index
1 48 0.2% 40.0% -4.8%
2 176 0.5% 40.0% -4.7%
3 16 0.0% 40.0% -4.6%
4 144 0.2% 40.0% -4.5%
5 56 0.2% 50.0% -4.4%
Low
6 49 0.2% 50.0% -4.4%
7 42 0.2% 30.0% -4.3%
8 184 0.5% 50.0% -4.3%
9 177 0.5% 50.0% -4.3%
10 18 0.0% 60.0% -4.3%
1 48 0.2% 40.0% -5.0%
2 176 0.4% 40.0% -4.9%
3 16 0.0% 40.0% -4.7%
4 144 0.2% 40.0% -4.7%
5 56 0.2% 50.0% -4.7%
Medium
6 49 0.2% 50.0% -4.6%
7 184 0.4% 50.0% -4.6%
8 177 0.4% 50.0% -4.6%
9 50 0.2% 60.0% -4.6%
10 18 0.0% 60.0% -4.6%
1 48 0.2% 22.2% -5.1%
2 176 0.4% 22.2% -5.0%
3 16 0.0% 22.2% -4.8%
4 144 0.2% 22.2% -4.8%
5 56 0.2% 27.8% -4.8%
High
6 49 0.2% 27.8% -4.7%
7 184 0.4% 27.8% -4.7%
8 177 0.4% 27.8% -4.7%
9 50 0.2% 33.3% -4.7%
10 18 0.0% 33.3% -4.7%

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Annex C – Best Practice Checklists
This annex presents 6 checklists which are aimed for use for utility-scale (ground-mounted) and
commercial rooftop PV installations. The checklists for residential systems are presented in the
report Technical Bankability Guidelines - Recommendations to Enhance Technical Quality of PV
Investments [3].
C.1. Best Practice Checklist for EPC Technical Aspects
/ Technical aspect & what to look for in the EPC contract
A Definitions, interpretation
1. Is there a set of definitions of important terms provided and are those clear and understood by all
stakeholders?
B Contractual commitments
2. EPC contractor qualification
3. Responsibility and accountability
4. Date of ownership and risk transfer are defined and acceptable
5. Construction start date and end date are defined and acceptable
6. Plant Commercial Operation Date (COD) is defined and in line with FiT or PPA commencement
dates
7. The EPC works should be carried in compliance with (non-exhaustive list)
• Grid code compliance: plant controls (e.g. ability for emergency shut-downs or curtailment
according to grid regulations)
• PPA compliance
• Building permits (if applicable)
• Environmental permits
• Specific regulation for the site (e.g. vegetation management, disposal of green waste)
C Scope of works – engineering

8. Overall the scope of works for the EPC should be clearly defined. Which activities are included in
the EPC services (is it a turnkey EPC)? Are they clearly defined?
9. The EPC should include Technical Specifications consisting of
• [Best practice] The operating environment is defined for:

o Minimum and maximum ambient temperature
o Maximum relative humidity
o Maximum altitude
o Local climate

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o Local conditions (e.g., snowy, sandy, near sea/chemical source/corrosive/agricultural
activity/purpose of building usage/etc.)
• Detail plant description on all major components including MV/HV equipment, monitoring,
meteo stations, security and surveillance
• Plant implantation schematic including not only the major components but also auxiliaries
(electrical cabinet, substations etc.) and facilities (storage, office, guard house, fences, road
access etc.)
• Single wire diagram
• Bill of materials of the major components
• Recommended minimum spare part lists (draft version of this information during EPC
negotiation should be updated to the final version when the plant is completed and handed
over)
• [Best practice] List of all applicable technical standards for major components (panels, inverters,
electrical equipment) (non-exhaustive list)
o CE Compliance
o Panel: IEC61215, IEC61730, IEC61701, IEC62716, IEC62804, IEC62108 (CPV)
o IR/EL: IEC60904-12 & 13
o Inverter: IEC62109
o Electrical equipment: IEC61000
o Tracker: IEC62817, IEC62727
o Design and installation: IEC TS 62548
o Commissioning: IEC62446
o Performance monitoring: IEC61724
10. Who is responsible for grid connection and the infrastructure to connect the PV plant to the grid
(transformer, export lines, substation) is clearly defined
11. Site suitability (ground installation)
• Geotechnical and soil study
• Any flood risk
• Other constraints (chemical in the air, corrosive air, etc.)
Site suitability (rooftop installation)
• Roof stability study
• Structural requirements of roof and mounting structure (both static/snow load and
dynamic/wind load
• Lightning protection requirement
• Fire protection (PV system should not be built across fire protection walls); design should be in
compliance with the building fire protection codes
• Requirement for weathering protection (lifetime of roofing film)

52
12. If the site study has been done and the results have been shared with the owner and the EPC, the
EPC contract should clearly acknowledge that the contractor has reviewed the results of the study
and has designed the PV system taking into account the site conditions and constraints
13. For rooftop system, the roof should be weatherproof throughout operations of PV plant without
major overhaul of roof laminate layer
14. Estimation of plant yield/production should follow best practice guidelines (see Annex C.3)
15. The plant design and estimated yield/production should be validated by third party
D Scope of works – procurement

16. All major components should be visually inspected at delivery
17. All modules should be tested for STC performance according to the IEC60904 standards at the
factory and the test data should be submitted to the EPC contractor for verification
[Best practice] All modules should be inspected with electroluminescence imaging camera at the
factory and the test data should be submitted to the EPC contractor for verification
18. PV modules should be sampled and tested after delivery and before acceptance
• List of test (and criteria) should be included in the EPC contract
• Tests are to be done by an accredited independent test laboratory
19. [Best practice] Transportation and handling requirements on components should be specified
20. [Best practice] EPC contractor is required to perform factory inspection on the module factory
21. [Best practice] Negotiation of technical requirement in supply agreement (i.e. module) and warranty
terms and conditions should involve inputs from technical advisors
E Scope of works – construction

22. The EPC should include comprehensive protocol and training to its field workers on how to un-
package and handle components properly
23. The installation of components should adhere the manufacturer’s guidelines when applicable
24. Regular construction monitoring by the owner (assisted by technical advisor) should be performed
to check construction progress and quality (and for milestone payments)
25. Reporting of construction progress should be included in the contract
26. Health and safety, housekeeping and site security are defined as the responsibilities of the
contractor during construction
F Scope of works – administrative and others

27. Responsible party for securing the site use is clearly defined:
• For ground-mounted utility systems: land lease, land purchase, and land access
• For commercial rooftop systems: roof lease, roof access
28. Responsible party to obtain permits and authorizations to develop PV plant is clearly defined
29. Any support required from the EPC contractors in permitting, grid connection etc. should be clearly
defined
30. Is the contractor responsible to carry out or only support warranty and insurance claims
management during the EPC period?

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G Manufacturer warranties
31. The terms and conditions of major components’ manufacturer warranties are clearly defined
• Effective start and end date
• Definition of defects
• Claim procedure
• The compensations proposed are reasonable and logical
• Exclusions
• Provision to allow for the involvement of third party expert during technical dispute
• Transferability
32. The warranty timelines should be in line with the EPC warranty timelines
33. Check if the jurisdiction of the warranty allows it to be legally enforceable
34. [Best practice] Are there additional insurances (transportation damages, e.g.) from either the EPC
contractor or component manufacturer?
H EPC warranty and Defect Liability Period (DLP)

35. Provide warranty of Good Execution of Works
36. The EPC contract shall provide at minimum 2-year EPC warranty from the date of plant take-over
37. The DLP duration coincides with the EPC and component manufacturer warranty duration
38. During this DLP, the EPC contractor is responsible to repair faults or defect at its own cost, or an
arrangement has been made with the O&M contractor to execute this. For the latter, clear scope of
work ownerships must be aligned to prevent avoidance of responsibilities
39. The party responsible to maintain the PV plant after take-over and before the end of DLP is clearly
defined
I Key performance indicators (KPIs) and guarantees

40. The EPC contract should have key performance indicators for two aspects
• Completion timeline: guaranteed completion date
• System performance and quality: guaranteed performance ratio (PR) or guaranteed output
41. The guaranteed PR or output should be calculated in a long-term yield estimation exercise using
correct technical assumptions, i.e. all relevant losses and uncertainties
42. Liquidated damages (LD) or penalties should be assigned in the contract in case the guaranteed
KPIs are not met
43. Completion delay LDs should be in line with the project revenue loss due to lateness in project
entering operation. The LD is commonly a % of EPC price for each day of delay
44. Performance LDs should be in line with the project revenue loss when the system is not meeting
the guaranteed performance level. The LD is commonly a % of EPC price for each point of PR or
output below the guaranteed value
45. Maximum amount of LD (LD cap) to limit contractor’s liability is usually included in the EPC
contract. E.g., delay LD and performance LD could each be capped at 20% of the EPC contract
price and the combined cap is 30% of the EPC contract price

54
J Commissioning and acceptance
46. The EPC contract should include plant provisional and final commissioning
47. Short term performance test should be carried out after the PV system completes the construction
phase
48. Provisional test set-up should include appropriate:
• Duration of the test
• Irradiance threshold
• Monitoring system, including measurement sampling rate and averaging method
49. The calculation method for the key performance indicator for provisional acceptance should
account for short-term effect on temperature and irradiance
50. Final acceptance plant performance should be carried out after the plant has been in operation for
a representative period of time (2 years after provisional acceptance)
51. Final performance test set-up should include appropriate
• Irradiance threshold
• Monitoring system, including measurement sampling rate and averaging method
52. The calculation method for the key performance indicator for final acceptance should account for:
• Annual degradation
• Plant availability
53. Measurement of irradiance to assess plant performance
• Irradiance measurements
• Measurement in the POA according to the Secondary Standard or First Class quality
classification (ISO9060:1990)
• Minimum requirement: one measurement device (pyranometer of high quality)
• [Best practice] At least 2 pyranometers
• If different array orientations, one pyranometer per orientation – careful assignment for proper
calculation of PR and yield
• Sensors placed at the least shaded location
• Sensors installed according to manufacturer’s guidelines
• Preventative maintenance and calibration according to manufacturer’s guidelines
• Set irradiance to be recorded with averages of 15 min (minimum requirement) or 1 min and
less (best practice)
• High quality satellite-based data to complement terrestrial measurements [best practice] –
mainly for monthly and annual values and not daily since the RMSE is high (8-14%)
• Minimum requirements for satellite data: hourly granularity or 15 min. Set data to be retrieved
once per day at least
54. Measurement of irradiance to assess plant performance
• Temperature sensor properly installed according to manufacturer’s guidelines

55
• Use of stable thermally conductive glue to the middle of the backside of the module in the
middle of the array, in the center of the cell away from junction box
• Accuracy should be <±1 C including signal conditioning
• For large systems, different representative positions for installing the sensor should be
considered: module at the center of the array and at the edge of this module where
temperature variations are expected
55. Inverter measurement to assess plant performance
• AC level: energy and power data should be collected
• Energy data should be cumulative values over the lifetime of the inverter
• Collect all inverter alarms – important to plan your maintenance activities (corrective and
preventative)
• Monitor and manage control settings at the inverter level and the grid injection level
• DC input measurements <1s sampling and <1min averaging
• DC voltage to be measured and stored separately for allowing MPP-tracking and array
performance problems
• [Best practice] measure all parameter from the inverters including internal temperature,
isolation level etc.
56. Energy meter
• Collection of energy meter data by the monitoring system in daily basis and with 15 min
granularity
• High accuracy energy meter is required – uncertainty of ±0.5% for plants >100 kWp
• The above point can be considered as best practice for plants smaller than 100 kWp
57. Plant visual inspection should be carried out during acceptance test
[Best practice] The visual inspection uses advanced tools such as IR camera
58. As part of the plant hand-over process, the EPC contractor must provide (non-exhaustive list)
• A complete set of as-build documentation (IEC62446, see Annex C.4 for complete set)
• Recommended minimum spare parts list

56
C.2. Best Practice Checklist for O&M Technical Aspects
/ Technical aspect & what to look for in the O&M contract
A Definitions, interpretation
1. Is there a set of definitions of important terms provided and are those clear and understood by all
stakeholders?
B Purpose and responsibilities

2. Is the fundamental purpose (goals) of the contract clearly defined?
3. Are the roles and responsibilities (and boundary conditions) of the multiple stakeholders within the
contract clear and understood?
C Scope of works – environmental, health and safety

Note: The Asset Owner has the ultimate legal and moral responsibility to ensure the health and safety of people in and
around the solar plant and for the protection of the environment around it. The practical implementation is normally
subcontracted to the O&M contractor.
4. Environment
• Regular inspection of transformers and bunds for leaks (according to the annual maintenance
plan)
• Recycling of broken panels and electric waste
• Sensible water usage for module cleaning
• Proper environmental management plan in place
5. Health and safety (H&S)
• Properly controlled access and supervision in the solar plant – necessary boundaries and site
restrictions
• Proper induction to ensure awareness of risks and hazards
• Proper training and certification on the specifics of a PV plant and voltage level
• Hazard identification/marking
• Wiring sequence marking
• H&S legislation available
• Established personal protective equipment (PPE) (not exhaustive list): safety shoes, high
visibility clothing, helmet, gloves (and/or insulated gloves), slash masks and glasses
(depending on the site), fire retardant and/or arc flash rated PPE where necessary
• Calibrated and certified equipment (full documentation available)
D Scope of works – operations

6. Documentation Management System (DSM)
• As-built documentation / IEC62446 (see Annex C.4)
o Site information
o Project drawings
o Project studies

57
o Studies according to national regulation requirements
o PV modules
o Inverters
o Medium voltage / inverter cabin
o MV/LV transformer
o HV switchgear
o UPS and batteries
o Mounting
• Management and control
o Define type of storage (physical or/and electronical)
o Ensure electronic copy of all documents
o Ensure controlled access to documents
o Ensure authorization for modifications – keep a logbook on name of person who
modified the document, date of modification, reason for modification and further
information e.g. link to the work orders and service activities
o Ensure history of the documents (versioning)
• Record control (see Annex C.5)
7. [Best practice] Predictive maintenance
• Define scope of this cluster, the type of performance analysis, the level (portfolio level, plant
level, inverter level, string level)
• Define the monitoring requirements needed to perform predictive maintenance, provide basic
trending and comparison functionality
8. Power generation forecasting
• Ensure a service level agreement with the forecast provider
• Define the purpose and consequently the requirements for power forecasting (e.g. time
horizon, time resolution, update frequency)
9. Reporting (see Annex C.6)
10. Regulatory compliance
• Grid code compliance: plant controls (e.g. ability for emergency shut-downs or curtailment
according to grid regulations)
• PPA compliance
• Building permits (if applicable)
• Environmental permits
• Specific regulation for the site (e.g. vegetation management, disposal of green waste)
11. Management of change: define responsibilities and involvement when PV plant needs to be
adjusted after the Commercial Operation Date: e.g. spare parts, site operation plan, annual
maintenance plan etc.
12. Warranty management

58
• Warranty of Good Execution of Works
• Warranty of Equipment
• Performance Warranty: agree on reporting period
• Classification of anomalies and malfunctions: Pending Works, Insufficiencies, Defects, Failure
or malfunction of equipment
13. Insurance claims management
E Scope of works – maintenance

14. Inclusion of an adequate Preventive Maintenance Plan
15. The minimum requirements for preventative tasks and their frequency follow the manufacturer’s
guidelines when applicable
16. The minimum requirements for preventative tasks and their frequency should respect relevant
national standards
17. Corrective maintenance (CM)
• Fault diagnosis (troubleshooting)
• Repair and temporary repairs
• Agreed response times and/or minimum repair times
• Clear definition of “boarders” and “limitations” of CM tasks, especially with preventative
maintenance and extraordinary maintenance. Definition of yearly cap of CM works (when
applicable)
18. Extraordinary maintenance
• Define what is included in this cluster
o Damages that are a consequence of a Force Majeure event
o Damages as a consequence of a theft or a fire
o Serial defects on equipment, occurring suddenly and after months or years from plant
start-up
o Modifications required by regulatory changes
o Agreed interventions for reconditioning, renewal and technological updating
• Define the rules on how to execute tasks and prepare quotations – ways of payment
19. Additional services: define what is included in this cluster and how this service is paid (non-
exhaustive list)
• Module cleaning
• Vegetation management
• Road maintenance
• Snow removal
• Pest control
• Waste disposal
• Maintenance of buildings
• Perimeter fencing and repairs

59
• Maintenance of security equipment
• String measurements – to the extent exceeding the agreed level of preventative maintenance
• Thermal inspections – to the extent exceeding the agreed level of preventative maintenance
• Meter weekly/monthly readings and data entry on fiscal registers or in authority web portals for
FiT tariff assessment (where applicable)
F Scope of works – data and monitoring

20. Irradiance measurements
• Measurement in the POA according to the Secondary Standard or First Class quality
classification (ISO9060:1990)
• Minimum requirement: one measurement device (pyranometer of high quality)
• [Best practice] At least 2 pyranometers
• If different array orientations, one pyranometer per orientation – careful assignment for proper
calculation of PR and yield
• Sensors placed at the least shaded location
• Sensors installed according to manufacturer’s guidelines
• Preventative maintenance and calibration according to manufacturer’s guidelines
• Set irradiance to be recorded with averages of 15 min (minimum requirement) or 1 min and
less (best practice)
• High quality satellite-based data to complement terrestrial measurements [best practice] –
mainly for monthly and annual values and not daily since the RMSE is high (8-14%)
• Minimum requirements for satellite data: hourly granularity or 15 min. Set data to be retrieved
once per day at least
21. Module temperature measurements
• Temperature sensor properly installed according to manufacturer’s guidelines
• Use of stable thermally conductive glue to the middle of the backside of the module in the
middle of the array, in the center of the cell away from junction box
• Accuracy should be <±1 C including signal conditioning
• For large systems, different representative positions for installing the sensor should be
considered: module at the center of the array and at the edge of this module where
temperature variations are expected
22. Local meteorological data
• [Best practice] Ambient temperature and wind speed with sensors installed according to
manufacturer’s guidelines
• Ambient temp with shielded thermometer e.g. PT100
• Wind speed with anemometer at 10 m height above ground level
• For large plants >10 MW automated data from an independent nearby meteo source to smooth
local phenomena and installation specific results
23. String measurements

60
• If not DC input current monitoring at inverter level, then current monitoring at string level is
recommended – depending on module technology, combined strings (harnesses) can help
reducing operating costs
• [Best practice] Increase up-time for timely detection of faults: 1 sec sampling and 1 min
averaging at data logger, maximum two strings current measurement in parallel
24. Inverter measurement
• AC level: energy and power data should be collected
• Energy data should be cumulative values over the lifetime of the inverter
• Collect all inverter alarms – important to plan your maintenance activities (corrective and
preventative)
• Monitor and manage control settings at the inverter level and the grid injection level
• DC input measurements <1s sampling and <1min averaging
• DC voltage to be measured and stored separately for allowing MPP-tracking and array
performance problems
• [Best practice] measure all parameter from the inverters including internal temperature,
isolation level etc.
25. Configuration
• In cases of change of O&M contractor (or recommissioning of the monitoring system), the
configuration of the monitoring system and the data loggers should be checked
• [Best practice] if technically available, auto-configuration is recommended – e.g. automatic
collection of inverter and sensor IDs and labels
• Back up of the configuration should be in place
26. Energy meter
• Collection of energy meter data by the monitoring system in daily basis and with 15 min
granularity
• High accuracy energy meter is required – uncertainty of ±0.5% for plants >100 kWp
• The above point can be considered as best practice for plants smaller than 100 kWp
27. AC circuit / protection relay
• [Best practice] Monitor the AC switch position for (sub) plants. Read the alarms from the
protection relay via communication bus if possible
28. Data loggers
• Sufficient memory to store at least one month of data
• Historical data should be backed up
• After communication failure, the data logger should resend all pending information
• The entire installation (monitoring system, signal converters, data loggers, measurement
devices) should be protected by a UPS
• [Best practices] Memory to store at least six months of data and full data backup in the cloud.
Separate remote server to monitor the status of the data loggers and inform the operations.

61
The system should be an open protocol to allow transition between monitoring platforms. If
possible, reboot itself once per day (during night time) to increase reliability
29. Alarms
• Minimum requirement: alarms sent by email (non-exhaustive list)
o Loss of communication
o Plant stop
o Inverter stop
o Plant with low performance
o Inverter with low performance (e.g. due to overheating)
• [Best practice] (non-exhaustive list)
o String without current
o Plant under UPS operation
o Intrusion detection
o Fire alarm detection
o Discretion alarm (or alarm aggregation)
30. Dashboard / web portal
• Minimum requirements for features of the monitoring system (non-exhaustive list)
o Web portal accessible 24h/365d
o Graphs of irradiation, energy production, performance and yield
o Downloadable tables with all the registered figures
o Alarms register
• [Best practices] (non-exhaustive list)
o User configurable dashboard
o User configurable alarms
o User configurable reports
o Ticket management
31. Data format
• Data format of recorded files according to IEC61724 – clearly documented
• Data loggers should collect alarms according to manufacturer's format
32. Communication from the site to the monitoring servers
• Best network connectivity with sufficient bandwidth according to the available monitoring
system
• DSL connection preferred if available at the PV site – industrial routers recommended
• [Best practice] GPRS-connection as back up
• For sites >1 MW it is advised to have a LAN connection and as an alternative an industrial
router that allows for GPRS or satellite communication back-up in case the LAN connection
fails. A router with an auto-reset capability in case of loss of internet connection is
recommended

62
• Data security should be ensured: as minimum requirements loggers should not be accessible
directly from the internet or at least be protected via a firewall. Secure and restrictive
connection to the data server is also important
• Communication cables must be shielded and protected by direct sunlight
• Physical distance between DC or AC power cables and communication cables should be
ensured
• Cables with different polarities must be clearly distinguishable (label or color) for avoiding
polarity connection errors
G Scope of works – spare parts management

33. Definition of ownership and responsibility of insurance
34. Define separate list of consumables if applicable (e.g. tools and fuses)
35. Stocking level: consider initial EPC list and the following parameters
• Frequency of failure
• Impact of failure
• Cost of spare part
• Degradation over time
• Possibility of consignment stock with the manufacturer
36. Location of storage/warehouse
• Proximity to the plant
• Security
• Environmental conditions
37. List of minimum spare parts (non-exhaustive list)
• Fuses for all equipment (e.g. inverter, combiner boxes etc.) and fuse kits
• Modules
• Inverter spares (e.g. power stacks, circuit breakers, contactor, switches, controller board)
• UPS
• Voltage terminations
• Power plant control spares
• Transformer and switchgear spares
• Weather station sensors
• Motors and gearboxes for trackers
• Harnesses and cables
• Screws and other supply tools
• Security equipment (e.g. cameras)
H Scope of works – plant security

38. Define protective measures for the plant
• Security protocol in place

63
• Video monitoring
• Alerting system
• Fencing or barriers
• Warning signs and notices
• Security pad codes and passwords
• Back up communication in case of vandalism
I Key performance indicators (KPIs)

39. Plant KPIs
• Availability
• Energy-based availability
• Performance Ratio
• Energy Performance Index
40. O&M contractor KPIs
• Reaction time
• Reporting
• O&M contractor experience
• Maintenance effectiveness and maintenance support efficiency
41. Security and surveillance of PV plant
• On-site or remote
• Around the clock coverage (24h/365d)
• On-site patrol, security camera
• On-site intervention time upon alarm etc.
J Contractual commitments
42. Qualification of parties involved: Owner’s Engineer, O&M contractor, monitoring, security firm
43. Responsibility and accountability
44. Bonus schemes and liquidated damages

64
C.3. Best Practice Checklist for Long-Term Yield Assessment
/ Technical aspect & what to look for in the LTYA
A Solar resource assessment

1. Only reliable solar irradiation data sources should be used and the name(s) and version(s) must be
clearly stated. Data source(s) used must be able to provide uncertainty estimations and ideally
have been extensively validated
2. The period covered by the solar irradiation data source(s) used must be reported. Only data
sources with more than 10-year recent data should be used for LTYA calculations
3. The effect of long-term trends in the solar resource should be analyzed. In the presence of such
trends, the long-term solar resource estimation should be adjusted to account for this effect
4. The use of site adaptation techniques is recommended to reduce the uncertainty. A measurement
campaign of at least 8 months and ideally one full year is recommended
B PV yield modeling
5. The PV modeling software and the specific version used must be clearly stated in the report
6. If in-house software is used, the name(s) and version(s) must also be stated
7. All assumptions (e.g. soiling losses, availability, etc.) and sub-models used (e.g. transposition
model) must be clearly stated
C Degradation rate and behavior

8. The degradation rate(s) used for the calculations must be clearly stated in the report. It is
recommended to differentiate between first year effects and yearly behavior over project lifetime
9. Degradation behavior assumption (e.g. linear, stepwise, etc.) over time should be clearly stated and
ideally backed up with manufacturer warranties
10. If specific manufacturer warranties are available (e.g. module warranty document or sales
agreement), these can be used to fine tune the lifetime degradation calculation
D Uncertainty calculation
11. All steps in the long-term yield calculation are subject to uncertainties. All uncertainties should be
clearly stated and references must be provided in the report
12. Special attention must be paid to the solar resource related uncertainties as these are among the
most important elements in the contribution to the overall uncertainty
13. If special methods are used to reduce some uncertainties e.g. site adaptation techniques, these
should be clearly documented and ideally backed up with scientific validation
14. Special care must be taken when classifying each uncertainty as either systematic or variable
(stochastic) since these are treated differently in overall lifetime uncertainty calculations
15. When possible, exceedance probabilities (e.g. P90) for each uncertainty must be calculated using
empirical methods based on available data instead of assuming normal distribution for all elements

65
C.4. Checklist for As-Build Documents – Type and Details
Information type and depth of detail / as-built documents
No. Minimum Description
Requirements
1 Site information • Location / map / GPS Coordinates

• Plant access / keys
• Access roads
• O&M building
• Spare parts storage / warehouse
• Site security information
• Rooftop condition and load requirements / restrictions (rooftop system only)
• Stakeholder list and contact information (for example, owner of the site,
administration contacts, firefighters, sub-contractors / service providers, ...)
2 Project drawings • Plant layout and general arrangement
• Cable routing drawings
• Cable list
• Cable schedule/ cable interconnection document
• Single line diagram
• Configuration of strings (string numbers, in order to identify where the strings
are in relation to each connection box and inverter)
• Earthing / grounding system layout drawing
• Lightning protection system layout drawing (optional)
• Lighting system layout drawing (optional)
• Topographic drawing
• Grid access point schematic
3 Project studies • Shading study / simulation
• Energy yield study / simulation
• Inverter sizing study
4 Studies according to • Voltage drop calculations
national regulation • Protection coordination study
requirements • Short circuit study
• Grounding study
• Cable sizing calculations
• Lightning protection study
5 PV modules • Datasheets
• Flash list with PV modules positioning on the field (reference to string
numbers and positioning in the string)
• Warranties and certificates
6 Inverters • O&M manual
• Commissioning report
• Factory Acceptance Test
• Inverter settings

66
• Dimensional drawings
7 Medium Voltage / • Medium Voltage / inverter cabin layout and general arrangement drawing
Inverter Cabin • Medium Voltage / inverter cabin foundation drawing
• Erection procedure
• Internal normal / emergency lighting layout drawing
• Fire detection and firefighting system layout drawing (if required)
• HVAC system layout drawing
• HVAC system installation and O&M manual
• HVAC study (according to national regulations)
• Earthing system layout drawing
• Cable list
8 MV/LV transformer • O&M manual
• Factory Acceptance Test report
• Type Test reports
• Routine Test reports
• Dimensional drawing with parts list
9 Cables • Datasheets
• Type and Routine test reports
10 LV & MV switchgear • Single line diagram
• Switchgear wiring diagrams
• Equipment datasheets and manuals
• Factory Acceptance Test report
• Type Test reports
• Routine Test reports
• Protection relays settings (only for MV switchgear)
• Switching procedure (according to national regulations) (only for MV
switchgear)
11 HV switchgear • Single line diagram
• Steel structures assembly drawings
• HV switchyard general arrangement drawing
• HV equipment datasheets and manuals (CTs, VTs, circuit breakers,
disconnectors, surge arresters, post insulators)
• Protection and metering single line diagram
• HV equipment type and routine test reports
• Interlock study
• Switching procedure (according to national regulations)
12 UPS and batteries • Installation and O&M manual

67
• Datasheets
13 Mounting structure • Mechanical assembly drawings
• Structural design calculation (rooftop systems only)
14 Trackers • Mechanical assembly drawings
• Electrical schematic diagrams
• Block diagram
• Equipment certificates, manuals and datasheets (motors, encoders)
• PLC list of inputs and outputs (I/O) by type (digital, analog or bus)
• Commissioning reports
15 Security, anti- • Security system layout / general arrangement drawing
intrusion and alarm • Security system block diagram
system • Alarm system schematic diagram
• Equipment manuals and datasheets
• Access to security credentials (e.g. passwords, instructions, keys etc.)
• Service level agreement with security company (if applicable)
16 Monitoring / SCADA • Installation and O&M manual
system • List of inputs by type (digital, analog or bus); I/O list includes e.g. sensor
readings that are collected by data loggers
• Electrical schematic diagram
• Block diagram (including network addresses)
• Equipment datasheets
17 Plant controls • Power plant control system description
• Control room (if applicable)
• Plant controls instructions
• Breaker control functionality (remote / on-site) and instructions
• List of inputs and outputs
18 Communication • Installation and O&M manual
system • System internal communication
• External communication to monitoring system or operations center
• IP network plan
• Bus network plans

68
C.5. Checklist for Record Control
Record control
No. Activity Type Information Type Input Record
1 Alarms / operation Alarms description Date and time, affected power, equipment code / name,
incidents error messages / codes, severity classification,
curtailment period, external visits / inspections from
third parties
2 Contract management Contract general Project name / code, client name, peak power (kWp)
description
3 Contract management Asset description Structure type, installation type
4 Contract management Contract period Contract start and end date
5 Contract management Contractual clauses Contract value, availability (%), PR (%), materials /
spare parts, corrective work labor
6 Corrective Activity description Detailed failure typification, failure, fault status, problem
maintenance resolution description, problem cause (*)
7 Corrective Corrective Associated alarms (with date), event status (*)

maintenance maintenance event
8 Corrective Corrective Date and time of corrective maintenance creation (or

maintenance maintenance event log work order), date and time status change (pending,
open, recovered, close), end date and time of the
intervention, start date and time of the intervention,
technicians and responsible names and function (*)
9 Corrective Intervention equipment Affected power and affected production, equipment

maintenance / element name code / name
10 Inventory management Warehouse Inventory stock count and movement, equipment code /
management name
11 Monitoring and Equipment status Date, status log (protection devices, inverters,
supervision monitoring systems, surveillance systems)
12 Monitoring and Meteo data Irradiation, module temperature, other meteo variables
supervision (ambient temperature, air humidity, wind velocity and
direction, …) (**)
13 Monitoring and Production / AC active and reactive power at PV plant injection point
supervision consumption data and other subsystems or equipment, consumption from
auxiliary systems, other variables (DC/AC voltages and
currents, frequency), power from DC field (**)
14 Monitoring and Performance data PV plant energy production; PR; expected vs real
supervision
15 Preventative Intervention equipment Affected power and affected production, equipment

maintenance / element name code / name, intervention start and end date
16 Preventative Maintenance Measurements, preventative maintenance tasks

maintenance description performed, problems not solved during activity and its

69
classification and typification, technicians and
responsible names and function
17 PV plant Commissioning Commissioning documentation and tests results (***)

documentation
18 PV plant Operation and Equipment manuals, PV plant O&M manual (***)

documentation maintenance
19 PV plant System documentation As built documentation (datasheets, wiring diagrams,

documentation system data) (***)
20 Warranty management Claims registration Affected equipment, claim description, occurrence date,
communications between O&M, client and
manufacturer/supplier
21 Security management Alarm intervention Alarms log, type of alarm, time of occurrence, counter
measures
(*) EN 13306 - Maintenance. Maintenance terminology
(**) IEC 61724 - Photovoltaic system performance monitoring - Guidelines for measurement, data exchange and analysis
(***) IEC 62446 - Photovoltaic (PV) systems - Requirements for testing, documentation and maintenance - Part 1: Grid
connected systems - Documentation, commissioning tests and inspection

70
C.6. Checklist for Reporting Indicators
Reporting Indicators
No. Proposed Indicator Predicted Measured Estimated
1 Insolation ● ●
2 Active energy produced ● ●
3 Active energy consumed
4 Reactive energy produced
5 Reactive energy consumed
6 Peak power achieved
7 Performance Ratio ● ●
8 Energy Performance Index
9 Balance of system efficiency
10 Plant external energy losses
11 Plant internal energy losses
12 Energy-based availability
13 Time-based availability
14 Inverter specific energy losses
15 Inverter specific efficiency
16 Module soiling losses
17 Module degradation
Note: ● Minimum Requirement, Best Practice

71
This project has received funding from the European Union’s Horizon 2020 research
Best Practice Funded
Guidelines
by the for PV Cost
Horizon 2020 Calculation
and innovation programme under grant agreement No 649997. The content of this
Framework Programme of the
report reflects only the author’s view and the Commission is not responsible for 72
any
European Union
use that may be made of the information it contains.

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Best Practice Guidelines for PV Cost

Best Practice Guidelines for PV Cost Calculation

Technical Risks in PV Project Development and PV Plant March 2016

Review and Gap Analyses of Technical Assumptions in PV July 2016

Minimizing Technical Risks in Photovoltaic Projects August 2016

Financial Modelling of Technical Risks in PV Projects September 2016

Best Practice Guidelines for PV Cost Calculation December 2016

Technical Bankability Guidelines February 2017

Proceedings from the Project Advisory Board and

2nd Project Advisory Board closed meeting December 2015

First Public Solar Bankability Workshop - July 2016

3rd Project Advisory Board closed meeting February 2017

Solar Bankability Final Workshop - Improving the attractiveness February 2017

Best Practice Guidelines for PV Cost Calculation

Mauricio Richter (3E N.V.)

EC Grant Agreement Number: No 649997

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

CAPEX capital expenditures

CPN cost priority number

DSL digital subscriber line

EPC engineering, procurement and constructions

GPRS general packet radio service

HVAC heating, ventilation and air conditioning

KPI key performance indicator

Best Practice Guidelines for PV Cost Calculation

HV/MV/LV high voltage / medium voltage / high voltage

PLC programmable logic controller

PPA power purchase agreement

SCADA supervisory control and data acquisition

UPS uninterruptable power supplies

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

PV LCOE reduction up to 4 to 5% is observed in all cases.

Best practice guidelines

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

1.2 Guide to Readers

Best Practice Guidelines for PV Cost Calculation

2.1 Risk Categorization in the Context of PV LCOE

Best Practice Guidelines for PV Cost Calculation

• The key takeaway of the risk;

• The impact of the risk mitigation on LCOE.

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

2.2.1 LCOE calculation and input data

Y0 = initial yield [kWh]

2.2.2 Sensitivity of LCOE to input parameters

Best Practice Guidelines for PV Cost Calculation

Input parameter Low Medium High

Best Practice Guidelines for PV Cost Calculation

Best Practice Guidelines for PV Cost Calculation

Ground-mounted utility systems (≥ 1 MWp)

Commercial rooftop systems (< 1 MWp)

Residential systems (up to 5 kWp)