A quick look at the most important strategy in procuring Solar PV balance of system (BoS).
Solar market in India is becoming extremely competitive with rapidly falling solar power tariffs. Ultimately it is putting immense pressure on module manufacturers and Solar PV balance of system (BoS) suppliers. BoS has been used as a very simplistic term to define the component requirements of a solar PV plant other than solar modules that roughly constitutes around 50 per cent of the project cost.
BoS refers to the components and equipment that move DC energy produced by solar panels through the conversion system which in turn produces AC electricity. Most often, BoS refers to all components of a PV system other than the modules. In addition to inverters and racking, this includes the cables or wires, switches, enclosures, fuses, ground fault detectors, and more. BoS applies to all types of solar applications like commercial, residential, agricultural, public facilities, and solar parks.
So, unlike the allusion (by its terminology), BoS encompasses a wide variety of components ranging from a small nut and bolt to large items such as inverters, cables and transformers or as different a task such as civil or erection works. Each in itself requires a complex project management process to optimise the outcome in terms of cost, time and performance, if looked independently. Also, as with any complex system/process, the marginal return on the invested time and effort may not be justified for micro-managing each and every component.
“With module prices are fixed for project, effective procurement strategies for BOS are crucial to control overall project cost, as BoS is a pretty substantial part of overall cost of project,” observes Chaitanya Palsule, Manager- Renewable Energy, Greenrays Enersol Pvt Ltd.
1 Systematic and analytical approach is essential
Commenting on the most important strategy in procuring BoS, Palsule said, “With PV modules come with standard warrantees of 25 years, BoS which has never provided with such long warranties, systematic and analytical approach is required while procuring BoS.”
He also points out that while achieving the cost, the quality of component should not be compromised. “There should be a balance between cost, quality and reliability of the BoS components. Strategic and analytic approach for BoS procurement like: Skilled procurement team, audit process for vendor identification and development, periodic vender evaluation, strong vendor engagement, establishing periodic rate contracts, vendor financing scheme, tie-ups and SLA with reputed vendors, and in-line inspection on sampling basis can help to achieve the target price,” Palsule recommends.
2 Quality and reliability of BoS is crucial
In aspect of O&M expenses of the system, quality and reliability of BoS is crucial. As lifespan of solar PV plant is considered 25 years, BoS should also maintain performance for lifespan of plant. “Though practically it is difficult to maintain the same quality throughout plant lifespan, minimum O&M schedules are expected which will result in reduction of recurring expenses on plant and also eventually optimise the plant performance,” Palsule suggests.
3Focus on system performance
According to Sanjay Aggarwal, Managing Director, Fortum India, “Companies in solar have been following various procurement strategies ranging from turnkey EPC for BoS items to splitting the contracts in number of packages in some cases more than 10/20. Also, a few have been following the 80/20 rule where in concentrating or optimising only on items having value more than 80% of the total value and deriving cost and performance advantages thereon. Whatever the case be, buying a complete system or buying lots of parts and then put them together has different requirements of competencies and resources.”
Procuring a system, Aggarwal said, “The requirements should be focused on the system performance such as quality and accessibility. The requirements if buying components, can be very detailed, every screw and nut that together makes up the system has to be specified. It is two diverse procurement strategies, and of course, in some cases it is advisable to combine these into some kind of hybrid. Therefore, choosing the right procurement strategy for solar is more to do with the understanding of organisation competences at present and what it wants to develop in future.”
4Getting the best rates
Addin Power believes that the quality, safety and profitability of a solar power plant do not only depend on the workmanship, efficient PV modules and the inverter, but also to the balance of system components. Ashish Joshi, Director, Addin Power Ltd says, “To get the most quality and cost efficient BOS, we do our home works in market. We float the specific inquiries with the vendors who are providing quality BOS and try to get the best rates proposal. We do offer them healthy business relationship by offering maximum order with huge quantity.”
5 Creating long-term relationship
Joshi further asserts, “We also ensure that the vendor will support us with timely delivery with competitive rates and well maintained quality. We do enter with them in agreements to get long term warranty of products with prompt services.”
6 Examine the vendors’ track record
It is a common trend in the Indian solar industry that the solar PV modules and inverters are given the limelight while selecting a solar system. More than the pricing of the individual elements, it is the ability of the supplier to service its product warranties and guarantees that play a huge decisive factor. Therefore, Uday Doshi, Founder, Excelsior engineering Solutions observes, it is crucial to examine the vendors’ track record and history of servicing claims of earlier customers.
7 Focus on peripheral elements
The peripheral elements play an essential role in ensuring a smooth operational life of the system. According to Doshi, “The quality, type and material of the module mounting structure used to anchor the modules in place need to be carefully selected based on the local site conditions. Only UV rated DC solar cables of reputed makes with proper certifications and sizing based on voltage drops should be used, otherwise there could be overheating of cables leading to frequent breakdowns.”
With 1,500 V DC modules and inverters being brought into market, it would be interesting to see how the BoS vendors supply SCBs, fuses, disconnect switches and cables to link these items. Doshi points out that there is a limited source of information and research that has been carried out in this segment. Additionally, he said, “The lack of global installations of these items, will prove challenging for local contractors if there are any issues with 1,500 V DC BoS equipment.”
8 Each element should comply with requisite standards
U-PVC conduits are to be used wherever cables are exposed to the environment, to prevent accelerated weathering. Regular conduits cannot even service a fifth of the service life of the project. Even the system earthing needs to be designed keeping in mind that in case of a surge or fault in the system, it is adequately and safely dissipated to the earthing system in place. For rooftop projects, adequate attention is not being given to bonding of structures, distinct groundings for DC/AC, LA protection etc.
According to Doshi, “It is absolutely essential that each element utilised in construction of a solar plant complies with the requisite standards as a failure of any of them could have a cascading effect leading to the loss of generation.”
9 Find out an alternate of steel
“To procure solar PV BoS,” Kunwer Sachdev, Managing Director, Su-Kam suggests, “Find out an alternate of steel and other material example alloys like zam and aluminium zinc to enhance the strength and life of the product without combing systems.”
He further recommends, “Analyse and find out new electrical and wiring pattern, to reduce cable consumption and make it more effective. Low height structure topology should be developed to avoid concrete or cement depth grouting. It also helps to increase the strength with other mediums and with concrete felting system.”
BoS plays an important role to achieve the desired Levelised Cost of Electricity (LCOE) for solar PV plants. The BoS components contribute considerably to the downtime of PV plant during its life cycle which in turn affects LCOE or “Rupees per unit”. “The best strategy to procure BOS equipment for on-time commissioning of solar PV plant with budget constraints are minutely selecting suppliers or products of quality, reliability, safety, required warranty, specs-compliance, on-time-delivery, logistics management, after-sales service and cost-effective price,” summarises Shailesh Patni, Head Sales & Marketing, Jyotitech Solar LLP.
“Though there is always challenges while implementing strategic processes, implementing it for procurement practice will results in delivery of project in time with improvising bottom line resulting in profit optimisation,” Palsule concludes.