At the current stage of maturity of the utility solar sector in India, the following are the more critical challenges encountered.
Purchasing Land – One, purchasing large tracts of adjacent land areas is always a challenge. This might however not be a tough challenge if EPCs are responsible for land selection.
Land levelling – Securing land for the project or allotment of the land by the government does not mean that it guarantees the suitability of the site for solar power plant construction. Aspects like the topography, soil, etc., has to be assessed properly. In lands where the soil is rocky or the terrain is sloped, it can get difficult to perform the land levelling operations.
Lack of Water Availability – In many water-depleted areas, it may be a difficult task to source good water resources for O&M activities such as panel cleaning.
In areas where there is a scarcity of water, sourcing good quality water will be an expensive affair over the long term. The water also has to be assessed for parameters such as PH, hardness etc.
Project Implementation challenges
Component procurement – It is important to ensure that a plan is in place for timely delivery of components. Delays due to a shortage of stock or logistical bottlenecks are common occurrences in the solar industry and this is something to watch out for.
Evacuation challenges – Right of way has been found to be a major issue in India. The land through which the evacuation poles pass through can belong to multiple parties. This often makes it an uphill and time-consuming task to get their permission.
Moreover, in a country where power outages occur frequently, it is getting increasingly difficult to maintain a 100% grid-uptime. Solar Mango recommends EPCs to check the power outage patterns in the region in order to ensure that high grid-uptime is available.
Local skill availability
The lack of local skilled labor can be a challenge for EPCs. Most often, EPCs find it convenient to employ local people as O&M personnel for the plant. But, training them takes time as well as money.
Time and cost over-runs
It can be challenging for the project manager to ensure the project is completed in a short time within the allotted limited budget. Very often, maintaining effective communication between various stakeholders – owner, designer, contractor, consultant, sub-contractor, supplier, etc., can be a tough task.
Solar Mango suggests EPCs to utilize construction management softwares specifically designed for solar projects to avoid delays and ensure smooth execution of the project. Implementing such innovative methodologies can go a long way in reducing time and cost over-runs.
Lack of Reliable Solar Power Output Projections
Solar Mango has heard many financial institutions complain that they still do not have reliable solar output projections from EPCs of prospective power plant developers.
This is owing to the lack of reliable radiation data and also because EPCs do not use reliable techniques for projecting solar power output over 25 years.
Now, the National Institute of Wind Energy (earlier CWET) has instituted Solar Radiation & Resource Assessment, for which it has established a number of mapping stations. This should hopefully enable the various stakeholders to overcome these challenges.
Liabilities for a solar EPC
Solar plant output not meeting expectations
As most EPCs guarantee a specified amount of solar output generation by signing a penalty clause with the developer, there can be considerable financial risks if the actual output is lesser. The EPC is liable to pay the developer a penalty for the revenue losses incurred.