Module Quality Assurance: Risk Mitigation and Safeguarding Project Value

Transcription

1 SPI 2016 Quick Talk Module Quality Assurance: Risk Mitigation and Safeguarding Project Value 13 September 2016

2 CEA is a solar PV advisory firm that is able to provide unrivaled insight into the manufacturing process to ensure the success of PV projects worldwide More than 60 Over employees 35 engineers A presence in 8 countries Over 8 years history Technical Advisory Engineering Services Over 8GW experience Quality Assurance Supply Chain Management Client engagements in 27 countries Audited 125+ solar factories worldwide Certified by Proud member of 2

3 Technical Advisors in the past have overemphasized downstream quality without looking as closely on the product in more detail Factory Level System Level Phase 1 Pre-production Quality Control Phase 2 Production monitoring Phase 3 Post-production Quality Control Phase 4 Downstream Support Module Inverters Racking Other BOS Module Inverters Racking Other BOS Module Inverters Racking Other BOS Design Construction Commissioning! Defining QA! Factory audits standards and! Production requirements monitoring! Contract/project set-up! Examination at job site (thermal imaging tests)! Third-party lab tests! System Design & Equipment Specs! Solar Output Analysis! Project &! System commissioning Construction support Management! Technical! RFP deconstruct Troubleshooting and LCOE analysis Other third-party test labs Independent Engineers (IE) 3

4 Module Bankability is resting on two problematic pillars: warranties and certifications. Warranties Certifications Long duration (25-30 years) Limited terms Many exclusions Not comprehensive Diagnostics costs not covered Lost revenue not covered Replacement costs not covered Lengthy claim process Replacement retrofits are technically challenging IEC standards by design offer only a very basic level of assurance Most experts agree that IEC standards are only good for 10 years in the field Even extended testing only proves the manufacturer s ability to produce a small number (20 pcs) of good modules Bill of Materials compliance during production is not assured Stability of production processes is not assured 4

5 CEA s Quality Assurance Program (CQAP) prevents risk and ensures that downstream project stakeholders maximize the output of their system Pre-Production Production Monitoring Pre-Shipment Container Loading Supplier s certification Input material monitoring Product Inspection Proper Packing Product and factory certification liaising TUV, SGS, UL, CE, etc. assessment centers Production environmental control; monitoring of inventory storage and manufacturing workshop Visual inspection Functional test Container type Container number Seal number EL test IV test Shipment plan Bill of Materials (BOM) inspection data review Production process control; monitoring of equipment calibration, stringing, lay-out, lamination, curing and framing ISO 2859 Sample rule QC standard AQL rule Content Listing Packing list Inspection certificate 5

6 Typical PV Module Production Process Flowchart: multiple steps, leading to multiple potential failure points Trimming 7. EL Testing 8. Framing 5. Lamination 5 9. Junction Box Installment 10. AB Glue Addition IV test 12. Packaging 1. Material Preparation 2. Cell Tabbing & Stringing 4. Backsheet Lay Up 3. String Interconnection

7 CQAP has been performed in various facilities of Tier 1 manufacturers and the distribution of defect rates has showed surprising results. 18.0% 16.0% YTD Project size 14.0% 15 MW Defect rates 12.0% 10.0% 8.0% 6.0% 30 MW 75 MW 4.0% 100 MW 2.0% 0.0% YTD TTTT Defect data from QA performed on over 100 projects totaling many GWs of modules 7

8 CEA has analyzed 4 case study QA projects and the insights gained can show the value of performing quality work on future projects 1. Projects demonstrate highly variable defect rates 2. Defect distribution varies greatly with project, location and in time 3. FMECA risk analysis (IEC 60812) similarly shows great risk variability 4. Even a 1% excess yield loss, can lead to substantial financial loss 8

9 4 case studies of typical projects produced at Tier 1 manufacturers shows the variability across manufacturers. Defect rate per project 7.0% 6.0% [CELLRANGE] [SERIES NAME] [VALUE] 5.68% 5.0% 4.0% [CELLRANGE] [SERIES NAME] [VALUE] Average defect rate [CELLRANGE] [SERIES NAME] [VALUE] 3.0% [CELLRANGE] [SERIES NAME] [VALUE] 2.0% 1.0% 0.0% Project 1 Project 2 Project 3 Project 4 9

10 Applying the FMECA methodology, the RPN defects are ranked for severity, occurrence and detectability to produce each RPN. RPN (Risk Priority Numbers): high values show relative high risk 3,500 3,000 2,500 3,290 2,758 Projects with seemingly low defect rates, may have a high RPN, and vice versa, when defect risk analysis is performed 2,000 1,944 1,500 1,463 1, Project 1 Project 2 Project 3 Project 4 10

11 Scattered defect distribution show that even on the same production lines as module assembly processes are not stable PROJECT 1 CELL 17% OTHER 3% EL 4% PROJECT 2 BACKSHEET 13% JUNCTION BOX 5% CELL 36% EL 69% OTHER 1% FRAME 29% BACKSHEET 7% GLASS 10% CELL STRING 6% PROJECT 3 OTHER 11% EL 8% CELL 16% FRAME 13% EL 10% PROJECT 4 CELL 28% FRAME 8% GLASS 6% BACKSHEET 6% GLASS 6% CELL STRING 51% CELL STRING 37% 11

12 CEA model for assumed module degradation per defect category* Assumed losses OTHER EL 53% 29% CELL 100% 90% 80% 70% 60% 50% 40% 30% 8% 20% 10% 0% 7% 40% CELL STRING GLASS 8% 30% FINAL ASSEMBLY 73% BACKSHEET 79% JUNCTION BOX FRAME * in excess of warranted degradation, at project midlife, based on reasonable assumptions about degradation caused by defects 12

13 Correlation of defect rates to average power loss derived from 4 project case studies. This loss will be mitigated if Quality Assurance is performed. 6.0% Average defect rate 5.68% 5.0% 4.0% 3.0% QA Virtuous Effect: The presence of a 3 rd party performing Quality Assurance leads to a virtuous effect. Overall quality improves. The absence of a 3 rd party oversight, inevitably leads to higher defect rates,and subsequently to higher calculated power losses by a factor. 2.0% 1.0% Average avoided power loss due to defects (calculated according to degradation model)* 1.10% 0.0% 4 projects average values * in excess of warranted degradation, at project midlife, based on reasonable assumptions about degradation caused by defects 13

14 Example of calculated NPVs for 2 projects, produced with and without Quality Assurance program, using three scenarios Sizes: 100 MW DC $30 M $25 M $20 M $15 M $10 M $5 M $ M $14.6 M $25.4 M Projects with Quality Assurance (no excess loss) Project A Project B $23.0 M $21.8 M $20.6 M $12.5 M $11.5 M $10.4 M Good scenario Medium scenario Bad scenario Project A, fixed tilt PPA $80 MWH EPC cost: $95m Project B, tracker PPA $60 MWH EPC cost: $107m A B Lending rate 6.00% 6.00% Equity 50.00% 50.00% Loan tenor O&M $1,000,000 $1,000,000 Land $500,000 $500,000 Inflation 2.50% 2.50% Tax rate 30.00% 30.00% PPA rate escalation 2.00% 2.00% Degradation of modules 0.65% 0.65% Energy yield per year MWh/MW 2,200 1,400 PPA in $/MWh Pdc in MW Discount rate 5.00% 5.00% EPC cost $/Wdc Interconnection cost $1,805,000 $1,805,000 Projects without Quality Assurance Bad scenario: manufacturer shows a big drop in quality w/o QA program (4 x 1% defect loss, or 4% in excess of warranty in project midlife) Medium scenario: manufacturer shows a medium drop in quality w/o QA program (3 x 1% defect loss, or 3% in excess of warranty in project midlife) Good scenario: manufacturer shows a small drop in quality w/o QA program (2 x 1% defect loss, or 2% in excess of warranty in project midlife) 14

15 NPV loss in $/W for the 2 projects, without applying Module Quality Assurance Programs, using three scenarios $0.060 $0.050 $0.049 $0.040 $0.037 $0.041 $0.030 $0.020 $0.021 $0.024 $0.031 $0.010 $0.000 Good scenario Medium scenario Bad scenario Project A Project B Bad scenario: manufacturer shows a big drop in quality w/o QA program (4 x 1% defect loss, or 4% in excess of warranty in project midlife) Medium scenario: manufacturer shows a medium drop in quality w/o QA program (3 x 1% defect loss, or 3% in excess of warranty in project midlife) Good scenario: manufacturer shows a small drop in quality w/o QA program (2 x 1% defect loss, or 2% in excess of warranty in project midlife) 15

16 Thank you for your attention The information herein has been prepared by CEA solely for the exclusive use of recipient. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither CEA or any of its affiliates, advisors or representatives will be liable (in negligence or otherwise) for any loss howsoever arising from any use of this presentation. 16