Commercial solar; what could possibly go wrong?
05 Sep, 2013
Over the last few years we have spoken to literally hundreds of solar business through our Commercial Solar Masterclass, which we held in conjunction with EcoGeneration.
Two of the most popular issues were around how to assess the risk of things going wrong and how to compete in a distorted market, where we have a huge range of prices and varying degrees of compliance with standards and best practice.
Well, I’m going to tell you a real story about just how wrong it can get.
Of late, I have had a number of calls from solar buyers who are at their wit’s end; desperate for help, concerned about what they have bought and frustrated with service levels. When time permits, I offer a pro-bono consumer advocacy service to help resolve problems and the latest one was a doosey.
I’m going to start by saying that there are always two parties in a dispute and to be clear, the consumer in this case (lets call her Mrs Jones) didn’t pay attention to some things that she should have. But I’m going to focus on the solar provider (s) because I have never seen such a stuff up; and it should be a lesson for everyone in why we need higher standards and more attention to detail in this 40kW commercial solar installation.
For the majority, doing the right thing, take heart that the extra time, cost and price premium you are seeking is worthwhile when you hear stories like this.
In the simplest of terms, here is the list of what the solar company got wrong:
- The prime contractor sub contracted the quoting to a company who a very poor understanding of what was required legally, technically and contractually
- The sub contractor produced a quotation that was vague, non specific and lacked detail and most importantly, grossly overestimated the likely income
- Used the wrong electricity rate to calculate potential savings ($0.06ckWh difference)
- No party offered a formal contract of supply detailing the terms and conditions of sale
- Despite proposing tilt frames, on the day of the installation the tilt frames were omitted reducing the array angle by 18degrees from optimum (lost product value $1000?, plus lost energy)
- Allowed another sub contractor on site whose team walked all over the surface of the panels, probably causing micro cracks
- At the time of final installation and invoice, without advice, reduced the inverter capacity by 7kW (lost product value >$3500)
- Added a datalogger with no consultation with the customer (added value $900)
- Failed to adequately advise the customer that metering connection costs could be substantial and were excluded ( extra cost $5000+)
- Failed to provide any electrical schematics
- Failed to provide any training
- Failed to provide a system manual
- Failed to commission the system (lost value of exports)
- Failed to install the system to relevant standards and codes
- Failed to adhere to relevant legal and legislative requirements during installation
- Failed to connect and commission the data logger
- And, to top it all off, connected the system to the wrong meters (see below)
Now, putting all the other stuff aside for a moment, this last point is the most crucial and in Mrs Jones’s case this was the $20,000 doosey.
Using SunWiz’s excellent PVSell software, I modelled the performance and financials of the system.
The first conclusion I came to was that using the correct electricity rate, the potential savings dropped by 15% from $20,949 to $17,806 p/a. Over a very conservative ten year forecast that works out to a $31,423 LOSS of savings.
Then by arbitrarily dropping the tilt angle (according to Mrs Jones, they just wanted to finish the job as quickly as possible and assured her it would make no difference at all), they added another $3800 LOSS of savings over ten years.
Then in the stuff up of all stuff ups they connected it wrong. This particular site has 4 meters; 2 with low loads, 1 with medium load 1 with high loads. Guess how it was connected? 26kW on the medium load and 14kW on the low load circuit.
Using PVSell, I then ran a bunch of scenario’s to see what the real outcome was and what could be. In a nutshell one meter was going to export (effectively at ZERO value) around $3,800 of energy each year (around 59%). The second meter was going to export around $5474 per annum or 45%.
So in total, simply by connecting it to the wrong meters, they were giving away $92,277 of this customers potential savings over ten years.
On top of this, they have over priced the system by downgrading the offering and the whole thing was a mess. My conversation started with Mrs Jones, in tears and in a state of utter desperation.
Now although this is not over yet, to their credit the prime contractor has been assisting so far and has actually agreed with the majority of claims, admitting that it is wrong, which is great.
They have also got a third, all new sub contractor on site who knows his stuff and is trying really hard to fix things so far, which is also great.
There is still some negotiation and rectification work to do before its all fixed but this is a glaring example of what could possibly go wrong and the magnitude of the ramifications. I’ve helped Mrs Jones to get what she rightly deserved and so far its been kept out of the courts.
Commercial solar is awesome but as systems get bigger, so do the risks; as I have said over and over again in our Masterclasses. Solar provides a financial outcome for clients through savings, effectively its only tangible product. Skimp on the details and you are risking a significant change in those same financial outcomes and customers should not and will not stand for it. There are tools and software and companies who can help you if you need it.
Its not rocket science people, but attention to detail counts.
Post expires at 2:08pm on Friday September 5th, 2014