Banking on the Sun: Solar Panel Performance for Investors, Users and Manufacturers
Renewable Energy Test Center
Bankability Studies: Knowing Your Risks
It’s no secret that renewable energy has been booming. The use of solar power alone has quadrupled in the past five years and is forecasted to double again in the next five years. Government policies have had varying effects on the popularity of renewable energy. Tax incentives and green-energy mandates enacted have both helped and hindered the growth.
At the same time, renewable energy tech also has its risks, and the biggest one may come from companies that tend to invest much time and resources into projects without doing suitable research. The lack of investigation — from engineering and contracting, to actual building and the generation and distribution of equipment — can quickly tank a project. Such is the case for many projects that include photovoltaic (PV) panels, which turn the sun’s photons into electrons that power a home, cell phone, or automobile. Before backing a project, investors need to ask: Will it be able to generate the estimated amount of energy? How long will it last? Will it burst into flames in a few years? When it comes to solar modules, financiers need answers to these questions — and they simply can not rely on an energy company’s guarantee of success.
Manufacturers may guarantee that their modules will last up to 25 years; but who’s to say the company itself will be around in 25 years? Cherif Kedir, co-founder and CEO of bankability and certification firm Renewable Energy TestCenter, or RETC, is all too familiar with this scenario.
“Not every module maker is the same,” he says. “There are some who use substandard materials to cut costs. When you do that, you introduce a much higher risk in the modules; they could catch fire and endanger people.”
Enter: Bankability studies. They provide an in-depth examination of a project’s potential for success: looking at its feasibility with regard to the company’s resources, how it will generate enough cash flow to justify costs, and if it will remain viable in the long-term. In short, bankability studies best describe to investors the financial risks of a project.
“In bankability testing, we extend the tests that are required under the certification guidelines, two to three times,” says Kedir. “We even introduce additional tests to ensure that the modules will last 25 years and beyond.”
For manufacturers juggling slim margins, and investors facing numerous risks, failure is acostly mistake. Dr. Ralph Romero, senior managing director of Kansas-based engineering and construction giant Black & Veatch Management Consulting (B&V) PV evaluation practice, can cite numerous instances when panel problems and failures could have been prevented if only manufacturers did bankability studies — and listened to its feedback. “In one case, a client did not implement all of them, which led to a recall of over a million modules in the field,” he recalls. “We’re talking about a liability to the tune of $150 million dollars.”
“That’s one of the advantages of working with us”
The importance of bankability studies cannot be understated, and RETC acknowledges this. Created in 2009 by former computer and semiconductor engineers Kedir and Alelie Funcell, RETC is now one of the top firms in the bankability sector, with a significant share of the US market. In March 2018, Japanese trading company Marubeni acquired a 70% stake in the company.
Kedir says: “We realized that there was a severe need in the industry to guide companies through the certification process, as well as reliability testing, proof of concept, durability testing, and market introduction.”
RETC doesn’t compete on cost. Instead, they stand by the quality of their work, customer service, and speed. A project takes about three to five months to finish, with data gathered within three US test sites, as well as other countries like India, the Philippines, and Chile. Best of all, customers have real-time access to data as tests are completed.
“That’s one of the advantages of working with us,” says RETC engineering director Emmanuel Siason. “You don’t have to wait months to find out if something is wrong. This is important, so manufacturers can correct mistakes at once.”
Reliable Data
In 2017, B&V partnered up with RETC to jointly evaluate, rank, and characterize double-sided bi-facial solar panels. B&V, which had revenues of $3.4 billion that same year, wanted to partner up with a company that could provide it with reliable and trusted test data and RETC not only met but exceeded their requirements.
Currently, RETC and B&V are working with the US National Renewable Energy Laboratory to create and/or validate an accurate predictive models for bifacial generation. In addition to the expansion into bifacial panels, RETC has partnered up with leading research institutes and certification agencies, such as Fraunhofer and VDE to developing bankability tests for energy storage systems based on lithium-ion batteries; these technologies are used in a variety of applications from mobility applications, such as bikes, automobiles and buses, to home and utility-scale storage and solar generation.
“It was important for us to establish a relationship with a trustworthy test lab experienced in PV, with a high reputation in the field and for professionalism," says Romero. "That led us to RETC.”
These panels, which can be placed vertically, such as on highway sound barriers, look to revolutionize solar, much the same way that trackers did. And while there isn’t an accurate predictive model for bifacial generation that lenders trust yet, he expects one will be available within the next two years. RETC and B&V are working with the U.S. National Renewable Energy Laboratory on that model.
In addition to the expansion into bifacial, RETC is moving ahead to start the same type of certification and bankability tests for energy storage systems, namely those based on lithium-ion batteries, which are used in utility-scale storage and home solar generation. That storage market growth forecast is “phenomenal,” says Kedir.
Marubeni is optimistic for the company's outlook and its potential to help the trading company evaluate the latest in solar and battery technology and integrate that into its global renewables and machinery businesses. This is a critical requirement for Marubeni and a major component in ensuring the reliability and reducing risks associated with long term solar power plant investments.
“Whether it’s the spread of solar power plants, distributed electricity generation, or fast-chargers coupled with better storage,” says RETC chairman Daisuke Matsukado, “moving towards a low-carbon society, we want to build on RETC’s expertise.