By Eric Domescik, co-founder and president, Renewvia Energy
Even in the midst of the COVID-19 crisis, the U.S. solar industry has shown impressive growth, with no signs of slowing down. According to a March 2021 report from SEIA and Wood Mackenzie, the industry added a record 19.2 GW of new capacity during 2020 — a 43% increase from 2019. The report also projected that by the end of the decade, the U.S. solar market would quadruple from current levels. This projected growth has numerous implications for solar developers across the country, including what will likely be an unprecedented demand for operations and maintenance (O&M) services.
Solar developers often contemplate how and when to expand their offerings to include O&M. In making this important decision, there are a number of factors to consider, ranging from the size of your client base to the availability and skillset of your employees, among other areas.
For Renewvia, we carefully explored expanding our solar development business to include O&M, prior to launching our maintenance division last year. We are fortunate to have built our EPC business around a client base that believes in the value of incorporating solar into their long-term business plans, with many installing solar at multiple facilities. With this in mind, we have always tried to offer maintenance and warranty replacement services beyond our standard one-year workmanship guarantee, as a way to provide additional value, gain referrals and earn potential new business.
However, as our client portfolio grew, we found ourselves in need of hiring full-time employees to focus solely on monitoring and maintaining existing sites. We also began to hear from clients a desire to formalize long-term services. We were extremely pleased to receive the welcoming and supportive responses from our clients on moving forward with O&M services for a fee.
According to Stuart Sherrill, president of SteelFab, Renewvia’s first O&M client, “We were looking to assure our investment in solar energy output is achieving its fullest potential. Having a professional relationship with an O&M provider like Renewvia has allowed us to focus on our core business of fabricating structural steel while providing peace of mind that we are fully utilizing and cashing in on our significant clean energy investment.”
Others communicated the need to ensure their solar investment was fully optimized. Marsh Butler, president of the Butler Automotive Group, shared, “We see solar as a definitive investment in our future as a company, and expanding our relationship to include O&M has enabled us to optimize that investment, which benefits both our business and the environment.”
Key considerations when forming an O&M division
When determining the right time to form an O&M division, there are several factors that should be considered. These include:
- Ensure critical mass to justify the investment. Renewvia ultimately chose to establish an O&M business when the client base was in place and there was a clear pathway for growth. It became evident that the demand for O&M was on the rise with current clients and clients where we act as a third-party O&M provider. There are a number of upfront costs, so without understanding the client landscape, it can be a risky decision.
- Hire a specialized and dedicated workforce. Providing first-rate O&M service requires a workforce with a highly specialized skillset that includes an understanding of data acquisition systems, performance monitoring and reporting, preventative maintenance planning, corrective maintenance execution and all aspects of solar PV. For an O&M operation to function at its best, these team members must be dedicated, experienced and able to react quickly to multiple clients with varying issues and opportunities.
- Invest in the right internal systems. O&M providers are only as good as their systems (and the people who operate them), which should offer actionable data that reflect the real-world performance of clients’ solar portfolios. Not only should systems include data acquisition, performance monitoring and diagnostics, but they should also provide real-time comparisons to actual performance on financial, operational and historical levels. Solar developers and EPC firms alike need to determine whether to outsource or develop their own proprietary performance monitoring systems and, more importantly, commit to them. Each of these choices has both cost and quality implications, and clients like consistency in both the outputs they receive and the commitment level and service that is provided.
- Deliver a customized O&M offering. O&M is not a one-size fits all approach. It should include offerings that work for companies and solar systems of all sizes, from robust preventative and corrective maintenance to the ability to inspect and fix equipment at specified intervals. At Renewvia, our systems range from 20 kW to 1.5 MW across multiple states and vary from rooftop installations to carports to ground-mounts. The customization of our O&M plans consider all these factors prior to finalizing with our clients.
- Take a customer service-oriented approach. As an O&M provider, it is critical to establish trust with clients, as you will likely spend a great deal of time on their sites. At Renewvia, we make the highest levels of customer service our imperative. These are values that are exhibited by our employees and required when we choose to use subcontractors for our work. We know that no matter how good the technology, relationships matter. According to John Thornburg, Renewvia’s O&M manager, “We always keep customer service at the forefront. This means really listening to our clients to understand their unique needs and then customizing solutions that work for them for the long-term.”
There is no question that the market opportunity is exciting and growing, but launching an O&M division must be done at the right time. Taking these key factors into consideration ahead of making the investment will enable solar developers to realize the full potential of O&M now and in the future.
Eric Domescik is the Co-Founder and President of Renewvia Energy, a global solar developer headquartered in Atlanta, Georgia.