Utility-Scale Solar Photovoltaic Power Plants A Project Developer’s GuIDE IN PARTNERSHIP WITH © International Finance Corporation 2015 All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 ifc.org The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability or completeness of the content included in this work, or for the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. Cover Image: SunEdison Amanecer project in Chile, by Juan Payeras/IFC Table of Contents FOREWORD . 1 ACKNOWLEDGEMENTS . 2 1 EXECUTIVE SUMMARY . 3 2 PHOTOVOLTAIC (PV) PROJECT DEVELOPMENT . 9 3 SOLAR PV TECHNOLOGY . 23 4 THE SOLAR RESOURCE . 42 5 ENERGY YIELD PREDICTION . 51 6 SITE SELECTION . 58 7 PLANT DESIGN . 66 8 PERMITS, LICENSING AND ENVIRONMENTAL CONSIDERATIONS . 94 9 EPC CONTRACTS . 103 10 CONSTRUCTION . 112 11 OPERATION AND MAINTENANCE . .. 125 12 POLICIES AND SUPPORT MECHANISMS FOR SOLAR PV .. 135 13 POWER PURCHASE AGREEMENTS . 149 14 FINANCING SOLAR PV POWER PROJECTS . 159 15 FINANCIAL ANALYSIS – PROJECT COSTS AND REVENUE . 173 ANNEX 1: COMMON CONSTRUCTION MISTAKES . 182 ANNEX 2: EPC CONTRACT HEADS OF TERMS . 187 ANNEX 3: O&M CONTRACT HEADS OF TERMS . 192 ANNEX 4: ROOFTOP PV SYSTEMS . 195 Table of Contents i List of Figures Figure 1: Project Development Stages . 10 Figure 2: Overview of Solar PV Power Plant . 24 Figure 3: PV Technology Classes . 26 Figure 4: Development of Research Cell Efficiencies . .. 31 Figure 5: PV Array Tilt and Azimuth . 31 Figure 6: Benefit of Dual Axis Tracking System . 34 Figure 7: PV System Configurations . 35 Figure 8: Transformer and Transformerless Inverter Schematic . 37 Figure 9: Efficiency Curves of Low, Medium and High Efficiency Inverters as Functions of the Input Power to Inverter Rated Capacity Ratios. 38 Figure 10: Effect of Tilt on Solar Energy Capture . 43 Figure 11: Pyranometer Measuring GHI Image . 44 Figure 12: Annual Sum of GHI, average 1994-2010 . 46 Figure 13: Annual Share of DHI to GHI, average 1994-2010 . 46 Figure 14: Inter-annual Variability in GHI (relative standard deviation) 1994-2010 . 47 Figure 15: Uncertainty in Energy Yield Prediction . 55 Figure 16: Shading Angle Diagram . 68 Figure 17: Voltage and Power Dependency Graphs of Inverter Efficiency . 77 Figure 18: Typical Transformer Locations and Voltage Levels in a Solar Plant where Export to Grid is at HV . 82 Figure 19: PV System Monitoring Schematic . 89 Figure 20: Typical EPC Construction Phase and Handover Protocol . 106 Figure 21: O&M Workers at a Large-scale Solar PV Plant . 113 ii A Project Developer’s Guide to Utility-scale Solar Photovoltaic Power Plants Figure 22: Spacing between Module Rows . 119 Figure 23 Module Installation on a Large Tracking System . 120 Figure 24: Module Cleaning Using Crane . 126 Figure 25 Module Cleaning Using Brush Trolley . 127 Figure 26: Module Cleaning Using Dust Broom . 127 Figure 27: Corporate Financing . 160 Figure 28: Equity Financing . 161 Figure 29: Project Financing . 162 Figure 30: Project Risk versus Project Definition . 163 Figure 31: Forecasted Average Capex Costs for Multi-MW Solar PV Park, 2010–2020. 174 Figure 32: Average Breakdown Costs for a Ground-mounted Solar PV Project . 175 Figure 33: Small-scale PV System Schematic . 196 Figure 34: Non-domestic PV Rooftop Schematic . 197 Figure 35: BAPV (Left) and BIPV (Right) Systems . 198 Figure 36: Reduction in Module Efficiency with Average Temperature Coefficient . 199 List of Figures iii List of Tables Table 1: Characteristics of some PV Technology Classes . 28 Table 2: PV Module Standards . 30 Table 3: Indicative List of Inverter-related Standards . 39 Table 4: Inter-annual Variation in Global Horizontal Irradiation as calculated from SolarGIS Database . 47 Table 5: Solar Resource Datasets . 48 Table 6: Losses in a PV Power Plant. 53 Table 7: Area Required for Megawatt-scale Solar Power Plant . 60 Table 8: PV Module Selection Criteria . .. 70 Table 9: Comparison of Module Technical Specifications at STC . 71 Table 10: Inverter Selection Criteria. 72 Table 11: Datasheet Information . 73 Table 12: Transformer Specification . 75 Table 13: Definition of Ingress Protection (IP) Ratings . 79 Table 14: Recommended Number of Pyranometers Depending on Plant Capacity . 90 Table 15: Performance Optimisation Strategies . 90 Table 16: Annotated Wiring Diagram Requirements . 91 Table 17: Typical EPC Payment Schedule . 105 Table 18: Solar PV Project Interfaces . 114 Table 19: IFC-financed, Utility-scale PV Plants in Chile . 150 Table 20: Solar PV Project Risk Matrix . 168 Table 21: 2013/14 Solar PV Capex and Opex Cost Variations . 174 Table 22: Average Benchmark Costs for Ground-mounted Solar PV Development . 176 Table 23: Key Inputs to the Financial Model . 178 iv A Guide to Utility-Scale Solar Photovoltaic Power Plants List of Abbreviations °C Degrees Centigrade EMI Electromagnetic Interference A Amp EPC Engineering, Procurement and AC Alternating Current Construction AEDP Alternative Energy Development Plan EPIA European Photovoltaic Industry Association a-Si Amorphous Silicon EPFI Equator Principles Financial Institutions BAPV Building Applied Photovoltaic ERU Emission Reduction Units BIPV Building Integrated Photovoltaic EU European Union BOO Build-Own-Operate EUA EU Allowance BoP Balance of Plant FAC Final Acceptance Certificate c-Si Crystalline Silicon FiT Feed-in Tariff CB Circuit Breaker GCR Ground Cover Ratio CDM Clean Development Mechanism GHG Greenhouse gas CdTe Cadmium Telluride GHI Global Horizontal Irradiation CE Conformance European (European Commission) GSM Global System for Mobile Communications CER Certified Emission Reduction GTI Global Tilted Irradiation CERC Central Electricity Regulatory Commission HV High Voltage CFADS Cash Flow Available for Debt Service IAC Intermediate Acceptance Certificate CIGS/CIS Copper Indium (Gallium) Di-Selenide ICC International Chamber of Commerce CIS Copper Indium Selenide ICSID International Centre for Settlement of Investment Disputes CSC Cost Settlement Center IEA International Energy Agency CSP Concentrated Solar Power IEC International Electrotechnical Commission DC Direct Current IEE Initial Environmental Examination DIN Deutsches Institut für Normung IFC International Finance Corporation DNI Direct Normal Irradiation IGBT Insulated Gate Bipolar Transistor DSCR Debt Service Coverage Ratio IP International Protection Rating or Internet DSRA Debt Service Reserve Account Protocol DSP Digital Signal Processing IPs Indigenous Peoples EHS Environmental, Health and Safety IPP Independent Power Producer EIA Environmental Impact Assessment IRENA International Renewable Energy Agency EN European Norm IRR Internal Rate of Return List of Abbreviations v List of Abbreviations (continued) ISC Short-Circuit Current PID Potential Induced Degradation JI Joint Implementation PIR Passive Infrared JNNSM Jawaharlal Nehru National Solar Mission PPA Power Purchase Agreement kWh Kilowatt Hour PR Performance Ratio LCOE Levelised Cost of Electricity PV Photovoltaic LD Liquidated Damages REC Renewable Energy Certificate LLCR Loan Life Coverage Ratio REC Renewable Energy Credit LPS Lightning Protection System REIPPP Renewable Energy Independent Power LTV Loan to Value Producer Procurement LV Low Voltage ROI Return on Investment MCB Miniature Circuit Breakers ROW Right of way MPP Maximum Power Point RPO Renewable Purchase Obligation MPPT Maximum Power Point Tracking SCADA Supervisory Control and Data Acquisition MRA Maintenance Reserve Account SERC State Electricity Regulatory Commission MTTF Mean Time to Failure SPV Special Purpose Vehicle MV Medium Voltage STC Standard Test Conditions MVA Mega-volt ampere TCO Total Cost of Ownership MW Megawatt TCP Transmission Control Protocol MWp Megawatt Peak TGC Tradable Green Certificate NAPCC National Action Plan on Climate Change THD Total Harmonic Distortion NCRE Non-Conventional Renewable Energy UL Underwriters Laboratories, Inc . NHSFO Non Honoring of Sovereign Financial UNFCCC United Nations Framework Convention on Obligations Climate Change NPV Net Present Value UV Ultraviolet V Open Circuit Voltage NREL National Renewable Energy Laboratory OC NVVN National Thermal Power Corporation V Volt Vidyut Vyapar Nigam VAT Value-Added Tax OECD Organisation for Economic Cooperation VDE Verband der Elektrotechnik, Elektronik und and Development Informationstechnik OEM Original Equipment Manufacturer WACC Weighted Average Cost of Capital O&M Operations and Maintenance Wp Watt Peak vi A Project Developer’s Guide to Utility-scale Solar Photovoltaic Power Plants Foreword Although it currently represents a small percentage of global power generation, installations of solar photovoltaic (PV) power plants are growing rapidly for both utility-scale and distributed power generation applications. Reductions in costs driven by technological advances, economies of scale in manufacturing, and innovations in financing have brought solar power within reach of grid parity in an increasing number of markets. Continued advancements and further cost reductions will expand these opportunities, including in developing countries where favourable solar conditions exist. Policy environments for renewable energy in the developing world are being refined, drawing