10 Tools to Improve Solar Asset Value

Back in March, we wrote about how much Solar Needs a Total Quality Revolution. The TL;DR: Much of solar is currently using early 20th century manufacturing practices to deploy solar across the country. There are notable exceptions, but with no impartial third party metrics to measure and share solar installation quality in the residential, commercial, or utility sectors, investors are (no pun intended) being left in the dark.

So then, how can solar installers and developers achieve this “Total Quality Revolution?” Over the last several months, we’ve continued our dialog with solar stakeholders across the industry to try to learn what is going right. We’ve also done some analysis of our own on what kinds of tools could be employed to improve quality. This list is by no means complete, but the adoption of almost any one of these practices will result in measurable improvements in quality.

Quality Bidding Requirements

As the old analogy goes: you get what you pay for. But this age-old wisdom hasn’t been applied to solar installation, where the contractor with the lowest bid usually wins it. While this may sound like good business at face value, cheap work usually results in significantly more costs than good work when you factor in rework and maintenance problems that plague slapshod workmanship.

In order to address this problem, the industry needs to measure more than just cost when reviewing bids. While the incentives may be indirect for investors to demand quality as an aspect of bidding, both the early stage and late stage investors have reason to demand quality. First, financiers of projects need to consider that tying up capital long term when it could be making more returns is wasteful and also higher risk. Late stage investors have the same concern in addition to the risk of inheriting shoddy work that will incur additional costs in the future. A 2016 McKinsey Report on the Value of Solar emphasizes the need for an aggressive approach to cost savings in solar construction through all the processes captured in quality assurance, including technology, labor, design, and construction.

In a market with many players struggling to differentiate themselves to investors, quality is an untapped focus area where solar companies could gain immense competitive power. Solar companies need to employ a quality checklist and require subcontractors to meet all the agreed upon metrics--or else. Whether the push comes from solar companies or financiers, using quality planning as a part of project bidding is essential in creating a way to differentiate and improve solar projects in a tightening market.

EPC Subcontractor Integration

Once a contractor has been selected, there has to be follow-through on quality measurement and management. We’ve heard many, many stories of EPCs handing off a project to a subcontractor, only to have them botch it in the implementation. Sometimes, the EPC won’t even see many parts of the project until it is under third party review. There is no quality assurance plan developed or enforced onto a subcontractor, leading to failures found only after the implementation. Without standardization in protocol for the physical construction, subcontractors in solar lack much of the uniformity in expectation that other industries, like general construction, hold.

The Solar Industry needs to tighten this up by engaging subcontractors with training programs and QA/QC organized by the EPC. Furthermore, contracts with subcontractors should include legal language stipulating that if certain quality measures are not met, payment can be withheld or the EPC can take direct control of methodologies. By making the expectations between EPC and subcontractor rooted in quality, projects are more likely to be delivered on time and as predicted without the costs of rework and delay of interconnection.

Targeted Training Programs

While we might advocate use of the financial “stick” with subcontractors, there are many, many examples across industry that show that the carrot is a much more lasting and effective tool to motivate positive change in process quality. Currently, where measured, performance in solar installation is tracked in aggregate, in other words, a good or bad installation. In order to gain actionable knowledge, performance metrics must be narrowed to individual tasks within installation. This data can be used to engage internal and external personnel in targeted trainings that improve their work where they need it instead of generalized training programs that waste time and money training people in processes they are already doing effectively.

While many solar companies use photographs or lists of common errors to mitigate issues, these programs are sparse, particular to one company’s protocols and technology, and not ubiquitous. Targeted training programs, in comparison, are long term and adaptive, and managed with quality in mind. Improving the ability to target specific tasks and groups of workers minimizes the breadth of training, enabling targeted training to be optimized for individuals, generating more consistent improvement, growth and oversight.

Supplier Feedback Loop

At present, the solar suppliers who provide the panels, inverters, BOS, etc., remain largely unaware of problems with their components because there is no feedback loop built into the process to notify them of these issues. EPCs and solar development companies need to build unbiased, data-driven feedback loops with their component suppliers so that the parts used in the field can continue to be improved in a data-driven way.

This data can take many forms: maintenance records, installation logs, QA/QC checklist reporting, or production data from sensors on the system. An integrated approach can include automatic feedback enabled by quality control software that sends common failure data directly to suppliers of modules, inverters, and related equipment. This automated feedback can quickly be gathered and integrated with inspector comments to make field data available to manufacturers and suppliers of equipment.

Safety Evaluation Plan

There’s a general sense in the industry that the focus on getting kW into the ground outweighs other measures, including safety. An employee’s sense of safety is paramount to her performing to the best of her abilities. The solar industry needs to do a better job of  creating a culture of safety, deploying continuous safety training programs and holding employees and contractors accountable for unsafe behavior. OSHA provides an excellent resource for solar construction safety, and Oregon SEIA has authored an exhaustive document as well.

Overall, safety will improve solar’s growth, reliability, and competitiveness with non-renewables. It is imperative that solar adapt and strive to exceed safety regulations for the long term quality assurance of projects and productivity and well being of their workers.

Codified Inspection Framework

The reality in the solar industry is that many smaller solar contractors simply don’t have a process for inspecting their work once it’s complete (QA) and course correcting installations while the work is being performed (QC). In fact, even many utility scale developers don’t have a proper framework in place that enables them to avoid making the same mistakes, in their case, tens of thousands of times. To overcome this, solar Installers of all sizes need to define an intelligent, statistically rigorous framework of tracked variables to measure the quality of their work.

One way this could be accomplished is with a technological service that provides this insights in a clearly formatted and user friendly platform, such as our SunKaizen application currently in development. This customizable tool provides insights from the field particularly oriented towards process improvement in quality control of solar procurement and installation.

Third Party Audits and Verification

Since solar is financed, much of the generating capacity being deployed does require some degree of third party auditing and inspection. But rather than thinking of third party inspection as a cost center, solar installers need to realize that working with an certified third party inspector (like CADMUS or IBTS) to verify the quality of their installations can provide them valuable insights to improve their process, saving them money and smoothing the path to financing.

Every inspection agency comes at the job from a different angle, so it’s important to do your due diligence and determine which aligns best with your goal to improve process, not just confirm quality. The more these inspection agencies hear from their clients that they want actionable intelligence from their inspections, not just box checking, the more likely they are to develop products and services specifically tailored to the bigger picture of process improvement.

AHJ (Authority Having Jurisdiction) Compliance Plan and Framework

The frameworks for city, county, and state solar installation compliance are extremely inconsistent. From wiring codes to components used, what passes muster with one AHJ won’t necessarily it pass in another. Because of this, it is imperative that solar installers working in different regions create and manage checklists for each AHJ jurisdiction and incorporate the input of new requirements into their process when moving into a new jurisdiction.

An effective way to do this is to make a list of jurisdictions where you operate, order them by installation volume, and collect citations from each jurisdiction. Take this citation data, and construct a pareto chart in order to determine the best course of action and prioritize checklist creation. Work your way down to your smaller jurisdictions in order of priority.

Maintenance Mitigation Plan

Maintenance costs are a massive problem in solar across the residential and utility scale, with rework of original installations being the norm rather than the exception. Rather than just shrugging and continuing business as usual, solar developers must identify root causes of ongoing or recurring maintenance issues and institute an improvement plan around them.  

Your improvement plan should be quantitative and account for the costs of maintenance as well as the components involved.  Examine your use of these components, whether they are in your array or balance of system. Remove or add components as necessary.  If you need additional help, this is a hot area of resource creation at this moment, and Sustainabilist would be happy to point you to our favorite readings.  Earlier this year, for instance, SunSystems Technology and Locus held a webinar on Greentech Media on how data sharing can address the wildly out of control O&M costs in solar.

Dedicated Quality Teams

Across the industry, we’ve often run into the mentality that says “I’ve been doing this for 20 years, I know what I’m doing.” Companies of any size need to assign quality accountability to an individual or team within their organization. Those assigned this role need to operate from the assumption that any process can be improved, rather than the assumption that it’s “good enough.” Simply having done something passably many times does not mean that the process is perfected. Giving even one person in your organization the task of constantly asking how things might be better can cause a systemic change that can give a solar developer a big competitive advantage.

Quality is also an industry-wide goal. Much of our above suggestions revolve around standardization and information sharing, and we believe a dedicated quality team should be interacting with and working alongside quality professionals across the industry. Quality is a driver of the industry-wide success of solar companies. These quality teams should be learning from one another to begin to organize in thought leadership, skill sharing, and workshops within larger, solar industry events.

Conclusions

Well measured, quality-driven processes are more efficient and save money. Implementation of these and other quality tools will help everyone, from suppliers to EPCs to financiers and even homeowners. We plan to continue on our mission to improve solar quality industry-wide. If you’d like to find out where you should start, contact us for a free assessment.