how to choose an epc contractor for pv projects

8/3/2019 How to Choose an EPC Contractor for PV Projects

1/14

Aspiration Energy Copy right 2010

H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

1

Solar MW PV Power plants

How to choose an EPC contractor

A check list and Guide


2/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

2

uilding MW scale solar power plant is at once a simple and a complex task.

It is a huge investment that will pay-back over several years, and hence careful

consideration needs to be given for choosing the right technology and execution

partners.

Many start ups and many wannabe consultants are claiming to be EPC contractors, in addition

to the panel manufacturers themselves. How do you assess capabilities? How do you

determine who can win that coveted EPC contract from you? What kind of business / pricing

model should you work with? Here is a guide. We have also provided a checklist for

evaluation of a EPC vendor.

B


3/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

3

What is involved in EPC contract for MW solar powerplants?

Engineering:

PV design & inverter selection:

There are many daunting questions and manydifferent answers. It is not as simple as someEPC contractors make you believe.

Do you make it with high voltage modules orlow voltage modules? Do you want 10 x 100KW per MW or 2 x 500 KW per MW of inverter? Which voltage range do youchoose? How many in series and how many in parallel? Which make of inverter suits thetemperature range and hence the voltage range? What will be the extremes that the designcan take from a voltage and current perspective, and what are the possibilities of that in thechosen location? On the inverter side modularity and efficiency curves based ontemperature conditions come into play as well.

Electrical design:

Line losses, wiring selection, weatheringpatterns for wiring this again is veryinvolved. What kind of junctions, where andhow the entire wiring is circuited again hasdesign complexities and considerations.

Structure design:

It is not simple fix it at degrees equal to latitude thing. Some companies who have experience elsewhere in the world have reported that good structure design can improveproductivity by as much 10% while reducing capital costs. This is an experience thing, andnot purely a theoretical calculation.


4/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

4

In another note, the system is as strong as theweakest component. If the structure does not last aslong as the panels, the best quality panels can gowaste and unproductive. Need to carefully evaluatealternatives on design as well as materials to ensurethey last long.

Civil design:

Again, the longevity can be greatly affected by this. As an example, there could be possibility

of rain logging in the site, and we may need to raise the panels up. But, if there aremaintenance issues when water is filled in the site we may still need access for the panels hence there may be a need for platforms that ensure access to the panels. This is just oneexample. There are so many other considerations that a good civil design can identify andprovide for.

Evacuation design:

There are strict norms with which EB will accept

the power, and design has to ensure that all those

conditions will be met at all scenarios. Specialist

consultants are needed for this, and not any other

electrical contractor.

Maintenance and monitoring design

Once you build the plant, it needs to be

constantly monitored for optimized performance

and hence a good ROI. Cost-benefit needs to be

analysed with respect to the best-in-class

monitoring solution.


5/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

5

Do you want to install measures per panel, or per array, or just live with inverter level checks?

Do you want to monitor the solar data? How does all this get reported? Who does what?

What spares should be kept? How is exceptions thrown? These are some considerations in

designing the right maintenance and monitoring system. Every system cannot be same because the location, manpower available and accessibility for different sites are different.

Procurement :

PV modules and inverter

This is by far the most important factor that can affect the initial capital cost, longevity of thesystem and performance of the system. Many considerations including how the panels arebuilt, what cells are used, what is the longevity of the company building it, what quality arethey willing to deliver for an Indian customer, what importance they attach to this project,flexibility of contract, and even packaging and transport of panels come into play.

Other BOM

Again none of the components can be taken lightly as the system will be as strong as theweakest component. Every single component has importance in the long run.

Commissioning:

Project Management Orchestrating all the pieces to come in place, as well as making sure that the engineering

specifications are met during execution is a very complex task, and one that requiresorganized and structured people.


6/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

6

Government Liaisoning

Networks, ability to get work done, ability to get paperwork done are skill sets needed forthis.

Team for execution: Major players in this phase are:

PV Panel supplier Inverter supplier Electrical contractor Evacuation contractor (different from electrical) Civil contractor including foundations Structural designer and contractor (different from civil)


7/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

7

What are the factors in choosing an EPC contractor

Factor 1: Who are the kind of players?

-- New independent Integrators/consultants

-- EB & other ex-government employees

-- New integrators with foreign tie-ups

-- Panel manufacturers

-- (Rare) Indian integrators with experience abroad

-- (Rare) Integrators with Indian experience

New independent integrators/consultants:

The huge opportunity thrown by solar mission and India's newfound love with solar energyhas peaked the entrepreneurial activity in India, and bright minds are jumping into thebandwagon. No doubts some of these will succeed in creating good companies that makes adifference for the solar field. But, the question will be how do you pick the winner from thewhole load of wannabe's?

You can choose them if: a) You know for sure that they are committed to persevere throughthe solar industry and they are reliable and not just jumping to cash in on a trend. How canyou find this? You can find this by understanding their business interests, their investmentinto the solar industry, their team and whether full-time or part-time, and so on. b) You arewilling to bet on someone because you know them, or you have some other interest in givingthem the business.

EB & other ex-government employees

No doubts, Government liaisoning is a huge part in constructing and running a solar powerplant. No doubts, such consultants are needed for the power plant. But, at the end of the day,you need to decide what the relative importance is. These people can ensure that the projectis up and make sure that the billing and payments happen, etc. But, how can they ensure thatthe plant is constructed well which is the essence of EPC contract?

You should certainly have these consultants as part of the team either directly as part of theteam brought in by EPC contractor.


8/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

8

New integrators with foreign tie-ups

Once again these are similar to independent consultants, but may bring strength more than theindependent ones. Commitment of the foreign player for Indian market is an importantconsideration, and the experience of the foreign player in similar climate and dust conditionsis an important factor. There is a HUGE difference between designing for Germany or theUSA and designing for India. As an example the advantage of MPPT the touted feature inmany inverters is less in tropical countries than in cold climates. It is not to say that MPPTis useless, but it is not as advantageous in hot climates as the voltage bands are lesser. This isnot something that may even have been considered by the foreign collaborator.

In essence, experience in similar climates and similar environments is an important factor.Equally important is the collaborator's commitment and responsiveness. Hundreds of wannabe integrators from India are approaching the dozens of qualified integrators, and many

integrators are not keen on India. So, just a name attached is not enough you need toevaluate the responsiveness, availability of the collaborator and of course the relevantexperience.

Another aspect is local supplier tie-up. A great foreign collaborator can help in getting a gooddesign and good solution, but execution locally means local tie-ups. Now that IndianGovernment has stipulated use of India made panels a good supplier tie-up to get the bestprice and best quality is also a pre-requisite for a good EPC contractor. Minimal tie-upsneeded for execution are

You also need to evaluate the long term plan for the collaboration.

This is one of the best options, if all the above conditions are met.

Panel manufacturers

These are seemingly excellent choices. They make the heart

of the technology and hence they probably are the best right? Not necessarily. First, their main business is notintegration or EPC, but manufacturing. EPC may just be avalue-add for them as a manufacturer or the way to push theirpanels. Second they may have the best expertise inbuilding panels but designing the system using panels is awhole different ball-game. Third getting them as EPC

contractors virtually seals the possibility of buying PV panels and inverters from any othermanufacturer. Fourth the India based module manufacturers have been export oriented for along-time. After all, Indian market is just opening up. They may or may not have domesticbandwidth for execution.


9/14


10/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

1 0

Factor 5: Execution tie-ups

At the cost of repetition, EPC is a team effort. No single company has the complete in-housecapability to do everything. Even if they do, it is not economical to do everything in-house,and you will be paying a premium to get the services from such a comprehensive contractor.

Ensure that the EPC contractor brings strengths of tie-ups or internal strengths in terms of:

-- PV Panel supplier-- Inverter supplier

-- Electrical contractor-- Evacuation contractor (different from electrical)-- Civil contractor including foundations-- Structural designer and contractor (different from civil)

Factor 6: Internal Team

An experienced team with excellent electrical

engineering background and management backgroundis a must in addition to a tie-up. No amount of external experience can replace a closer look at theproject at hand.

Factor 7: Financial strength

Does the EPC contractor have the financial means to handle largeprojects worth a few million dollars? Or is it a technically strongcompany but new to large projects? This is an often ignored but a

very strong evaluation point. Do you want the largest guys withfinancial muscle? Not necessarily.

Your project value being a huge multiple of the small EPCcontractor's financial position will mean a risk. The project value

being a miniscule proportion of a large EPC contractor's financialposition is also an equally big risk. Ideal is a contractor that has the right financial strengthfor the project.


11/14


12/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

1 2

Checklist for choosing EPC contractor

Factors Tick ( )Appropriate

Score

Factor 1: Type of player

New independent Integrators/consultants

EB & other ex-government employees

New integrators with foreign tie-ups

Panel manufacturers(Rare) Indian integrators with experience abroad

(Rare) Integrators with Indian experience

Factor 2: Experience

Factor 3: Technology Tie-ups

Factor 4: Supplier tie-ups

Factor 5: Execution tie-upsFactor 6: Internal Team

Factor 7: Financial strength

Factor 8: Commitment to India & to your project

Factor 9: Flexibility


13/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

1 3

Conclusion

Aspiration Energy 9REN is also a player in the EPC space. Hence this guide may beperceived as biased. We have tried to be as unbiased as possible.

There is a famous Kural saying in Tamil: Epporul Yaar Yaar vaai ketpinum, apporulmeipporul kanbadhu arivu. The meaning (not literal): You can hear so many things from somany different people. Wisdom is in finding the truth and taking the essence of the same foruse.


14/14


H o w

t o

c

h o o s e

a n

E P C

c o n

t r a c

t o r ,

p a g e

1 4

About Aspiration Energy

Aspiration energy is promoted by co-founders of Aspire Systems, a successful, 500 people,

profitable IT services company. Supported by the IIM Ahmedabad's Centre for Innovation

Incubation and Entrepreneurship (CIIE) and Ministry of New and Renewable Energy

(MNRE) under the Renewable Energy Search program, Aspiration Energy brings the services

of design, sourcing, installation, commissioning and servicing for solar photovoltaic and solar

thermal systems. Aspiration Energy also brings the expertise tie-up with a Spain based

Integrator 9REN, who have more than 100 MW installations. We bring in good tie ups with

Chennai based electrical consultants, architects, LEED consultants and structural engineers, in

addition to project managers, to provide a well-rounded service to make economical solar

installations a reality today.

how to choose an epc contractor for pv projects

Documents