APAC to make up nearly half of global solar repair spend by 2025

Solar power systems nearing inverter end of life accounts for 5% of the global PV market.

APAC region will account for $4.1b of the $9.4b total non-residential solar PV operations and maintenance (O&M) market by 2025, according to new research by Wood Mackenzie.

Solar power systems nearing inverter end of life currently account for 5% of the global PV market. This number is expected to grow 16% or 227 GWDC of solar systems by 2025.

However, the research notes that repowering and maintenance of these solar power plants will come at a cost, as some solar inverters present earlier faults from the estimated 10 years. Wood Mackenzie estimates that approximately 4.2 GWdc of solar assets will run into premature failures in 2020, with this annual total jumping to 36 GWDC in 2025.

“Premature inverter failures will grow as the global PV fleet ages. Though less than 1% of systems experience premature failure, between 10% and 12% of O&M costs are dedicated to inverter replacements,” said Leila Garcia da Fonseca, Wood Mackenzie principal analyst.

The wide-scale adoption of auctions is also driving solar levelized cost of energy (LCOE) further down and putting additional pressure on O&M costs, according to Wood Mackenzie. This is in addition to the content of contracts signed by developers and asset owners, as most O&M contracts currently signed on the lower end of the cost range ($3-5/kW/year) miss vital aspects of operating and maintaining a solar power plant properly

The research notes that, in the long term, asset owners are likely to incur more costs with an a-la-carte service structure than if opting for an all-in service contract.

On the other hand, Wood Mackenzie’s global annual solar installation forecast for 2020 has been downgraded by 17% to reflect coronavirus’ impact. However, the market has shown resilience with limited effects on operations despite short-term effects.

As solar power is expected to play a key role in the energy transition, with annual installations forecast to average 135 GWDC between 2022 and 2025, the O&M opportunity is an attractive one for market players.

2019 saw further consolidation in the global O&M market, as the top 15 vendors increased their market share from 51% to 54%.

Affiliated service providers (ASPs) managed the largest share of the global O&M market followed by engineering, procurement and construction companies (EPCs). Module manufacturers (ModCos) retained the number three ranking, despite experiencing a 1% market share loss when compared with 2018, whilst inverter manufacturers saw a 1% market share growth in 2019 to reach fourth place in the global rankings.