Solar Energy Webinar Series
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PHOTOVOLTAIC INSTALLATIONS Equipment Overview / Property Insurance Exposures and Underwriting Considerations November 8, 2011 Presenters Equipment Overview / Property Insurance Exposures and Underwriting Considerations Robert Beck Rick Pizzella Senior Vice President, Engineering Principal Engineer Corporate Insurance Partners Emerging Technologies Munich Reinsurance America, Inc. The Hartford Steam Boiler Inspection & Insurance Company 2 Agenda Introduction Photovoltaic Equipment Overview Property Exposures Questions and Answers 3 PHOTOVOLTAIC EQUIPMENT OVERVIEW What are Photovoltaics? Photovoltaic (PV) cells (or solar cells as they are often called) are semiconductor devices that convert sunlight into direct current (DC) electricity. 1950s era PV cell laid over a modern crystalline silicon cell Photo Courtesy of DOE/NREL 5 PV Cell Types PV Cells – Old and New Thin Film . Crystalline silicon . Thin film Multicrystalline . Multi-junction . CIGS Single Crystalline Photos Courtesy of DOE/NREL 6 Crystalline Silicon . Cells built on a silicon- wafer substrates ‒ Generally ~350 microns thick . Proven technology . More efficient than thin film ‒ Commercially used cells ‒ 13 - 19% efficient BP Solar’s Product Line of Crystalline Silicon Modules for Residential and . More expensive than thin Commercial Buildings film Photo Courtesy of DOE/NREL 7 Thin Film . Inexpensive substrates used – e.g., stainless steel coil stock . A thin layer of PV material is then applied to this substrate – Generally ~3 microns thick . Example PV materials include – Amorphous Silicon (a-Si) – CdTe Thin Film Solar Cell – CIGS . Commercially used thin-film cells are 7–14% efficient Photo Courtesy of DOE/NREL 8 PV Configuration Definitions . PV Cells are configured into modules . Modules are configured into factory sealed units called panels . Panels are connected in series into strings . Strings are connected in parallel to form arrays A failed panel must be replaced with a panel having exact characteristics to avoid mismatch 9 PV System Configurations Stand-Alone PV System Grid-Connected PV System Source: http://www1.eere.energy.gov 10 Standard PV Hardware . Inverter (power conditioning unit) – Convert DC electricity to AC . Panel mount – keep the panel oriented towards the sun . Combiner boxes – consolidates strings . Storage – store extra energy (batteries) . Fuses, disconnects, and diodes Photo Courtesy of DOE/NREL 11 PV Hardware Inverter (PCU) << Large Inverter Microinverter >> . Used to convert DC to AC . 10 year life expectancy . Should be at least 90% efficient . Microinverter alternative Photos Courtesy of DOE/NREL 12 Mounting Systems Fixed Fixed Position . Cost effective but inefficient . The racks & panels are set in one position (typically angled at 30o facing southward) Rack System . Ballasted Racks . Penetrating Racks Fixed Position Flat Panel Ballasted Array Photo Courtesy of DOE/NREL 13 Mounting Systems Tracking Single Axis Solar Tracker Dual-Axis Solar Tracker Single Axis Multi Axis . East to West . East to West . Horizon Photos Courtesy of DOE/NREL 14 Building Integrated PV (BIPV) . PV systems are being integrated into building components and materials . PV integrated into building awnings, windows and rooftop shingles << Awning Windows >> << Shingles Photos Courtesy of DOE/NREL 15 Energy Storage Battery banks Mainly used in stand-alone systems Additional hardware required Charge controller Battery Bank Installations Photo Courtesy of DOE/NREL 16 PV Cooling . Heat degrades PV performance . Panels are cooled using: – Heat sinks – Specially designed aerodynamics that promote cooling – Hybrid panels with water jacket Photo Courtesy of DOE/NREL 17 PHOTOVOLTAIC INSTALLATION EXAMPLES PV Installation Types Residential Non-Residential (Commercial) Utility Type 19 Residential Installations Single-family residential homes Multi-family residences Photos Courtesy of DOE/NREL 20 Non-Residential Installations Hyatt Regency – New Brunswick, NJ Rooftop PV Solar . Fixed flush mounted panels . Peak power – 421 kW . Area – 32,000 sq. ft. Tracking – none 21 Non-Residential Installations Munich Re – Princeton, NJ Photo Courtesy of Munich RE Solar Parking Canopy 2.5 MWp Photo: Artist rendering of a SunPower Corp. solar power canopy similar to the one planned for Munich Reinsurance America, Inc.’s Princeton area headquarters. 22 Non-Residential Installations Other Stand-Alone Installations Portable trailer PV generator Farm water pump PV system Photos Courtesy of DOE/NREL 23 Utility Type Installations Waldpolenz Solar Park, Germany Bavaria Solarpark Peak Capacity: 40 MWp Peak Capacity: 10 MWp Area: 495 acres Area: 62 acres Panels: 550,000 - First Solar (72W) Panels: 57,600- Sharp (200W) Type: Thin Film CdTe Type: Crystalline Silicon Inverters: Siemens 24 FIRST PARTY PROPERTY EXPOSURES Solar Projects – Underwriting Considerations Design Standards & Manufacturing Insurance Coverage Risk Management Hazards and Insured Perils Contractual Issues 26 Design Standards and Manufacturing 27 Design Standards and Manufacturing Solyndra Files for Bankruptcy 28 http://www.solyndra.com/2011/09/solyndra-suspends-operations-to-evaluate-reorganization-options/ Design Standards and Manufacturing Considerations . Use established manufacturers . Avoid experimental, prototypical PV . Understand equipment and warranty ‒ Inherent defects ‒ Serial defects (loss history?) ‒ Material degradation ‒ Errors & Omissions . Turnover in manufacturers . Ensure availability of spares or make replacements contingencies if spare parts are no longer available? 29 Bottom Right: Integrated Circuitry & Power Connectors Design Standards and Manufacturing Considerations . Electrical standards (current?) Single Axis . Suitable designs for Solar Tracker emerging and rapid technology change . Properly designed for climate (temperature, Dual-Axis lightning, wind, snow & ice) Solar Tracker . Structural standards - static and dynamic loads . Site layout construction/ repair issues Photovoltaic . Age (old vs. new Concentrator equipment and parts) Photos Courtesy of DOE/NREL 30 Insurance Coverage . Production Tax Credit (PTC) renewed through 2012 . Investment tax credits = 30% . Modified Accelerated Cost Recovery (Tax Deduction) Federal . 50% depreciation bonus (tax deduction) . Federal grant programs . Federal loan guarantees . Renewable Portfolio Standards (RPS) . Renewable Energy Certificates (RECs) . Feed-in-Tariff State . Net Metering . State and/or Utility Loan Programs . http://www.dsireusa.org The need for coverage is driven by the growth due to incentives. 31 Insurance Coverage Considerations Existing Solar Installation Retrofit Into Existing Property New Construction Physical Damage, Delay in Startup, Testing Special Covers Photo Courtesy of DOE/NREL 32 Insurance Coverage Considerations First Party Coverage Consideration . Property . Equipment breakdown . Natural catastrophe ‒ Flood ‒ Earthquake . Time element Not all policies cover all these risks. 33 Insurance Coverage Existing Solar - Property Most commercial property policies will cover existing solar installations, however; 1.Must be owned or responsible for insurance 2.Must include values (replacement or ACV) 3.May not cover all perils a. Equipment breakdown b. Flood c. Earthquake d. Time element 34 Insurance Coverage Equipment Breakdown Policies May Exclude Electrical Arcing Advanced Protection Technologies 35 Insurance Coverage Equipment Breakdown Policies May Exclude Mechanical Breakdown Damaged pinions caused in a storm, however pictures below show potentially exposed mechanicals. 36 Insurance Coverage Retrofit Into Existing Property What if a solar panel is added to an existing property? 1. Each policy is unique! 2. How will the policy respond? 3. There may be limitations/exclusions; a. Course of construction-COC b. Reporting c. Increase in hazard-risk change d. Testing e. Additional policies 4. Who is responsible for the insurance? a. Owner b. Contractor c. Utility d. Additional insured 5. What if existing property is damaged? A separate policy may be needed to protect interests of project and insured as existing Insurance may be inadequate. 37 Insurance Coverage New Construction-New Location Typically handled by a separate policy such as Erection All Risks-EAR Policy a.k.a. Builder’s Risk Additional coverage options include: 1. Extension on an existing property policy a. Limits will apply 2. Endorsing to an existing property contract a. coverage may not be suitable for risk b. Adds additional exposure that may effect your permanent coverage Outdoor swimming pool stadium under construction Photo Courtesy of DOE/NREL 38 Insurance Coverage New Construction - New Location What is being covered? 1.Hard costs . Solar panels and related physical costs . Labor and materials 2.Soft costs . Directly related to construction project, no physical existence . Fees, permit costs, insurance premiums, taxes, debt service. 3. Time element considerations . Delay in start up . Advanced Loss of Profits (ALOP) Photo Courtesy of DOE/NREL 39 Insurance Coverage Special Covers 1. “Lack of Sun” – coverage for investors to smooth results 2. Cover for availability and performance 3. Cover for carbon risks 4. Accumulation control – wind, flood, EQ, and terrorism 40 Insurance Coverage Special Covers Solar Module Performance Warranty: 20 to 25 years 90% for years 1-10; 80% for years 11-20/25 210 Wp 200 Wp Annual degradation 0.2% 90% Claim Expected case Warranty claim: 80% Claim 1.1% 2011 2021 2036 Excessive annual degradation will may result in warranty claims. 41 Risk