Repowering Solar PV Projects

An assessment of the solar PV industry identifies opportunities and technical considerations for repowering solar PV projects

U.S. solar farms are aging, and electric power demand is soaring. Solar photovoltaic (PV) project owners must decide on the upgrades and retrofits that will increase output and reliability while extending their facility’s operating life.

From both a technical and policy standpoint, the current U.S. solar market has strong incentives for solar PV project investment. The technical impetus is the industry’s aging operational fleet, which has begun to exhibit the need for at least partial major component replacement; this will continue to at an increased rate over the next five years. On the policy side, the Inflation Reduction Act (IRA) has created financial incentives in the form of investment and production tax credits for energy infrastructure investment. 

These tax incentives — both the 30 percent investment tax credit (ITC) that was extended by the IRA and the production tax credit (PTC) which, as a result of the IRA, now applies to solar PV projects — are paramount. They impact a project’s economic viability and guide the owner’s decision on which major components should remain and which should be replaced. 

Applying tax credits to repowered solar projects

The tax credits apply to new facilities. While the Internal Revenue Service (IRS) has not yet provided guidance on what constitutes a “new facility” for repowered solar PV projects, its guidance on wind projects (to which ITCs and PTCs applied prior to the IRA) can be used as a reference point. 

A repowered wind facility can re-qualify for PTCs as a “new” facility if the value of the facility’s remaining used property does not exceed 20 percent of the total of the post-repower property’s value. This is referred to as the “80/20 test.” It is reasonable to infer that solar PV projects must satisfy the same rule to be eligible for tax credits under the IRA. 

It is also reasonable to infer that this rule applies to individual inverter blocks within a PV project (instead of to the project as a whole). Proposed U.S. Department of the Treasury regulations state that when applying the 80/20 test, the test is to be performed on a “unit of qualified facility,” defined as "all functionally interdependent components of property … that can operate apart from other property to produce … electricity.” 

For a solar project, components can be considered functionally interdependent if they can generate electricity independently from the rest of the project and can be separately metered. A string of panels connected to an inverter may satisfy the functional interdependence standard if they are separately metered, and may therefore be eligible for the tax credits. 

Lessons from wind repowering

Recent partial repowering of wind projects have been able to meet the criteria to claim the PTC while reusing, at a minimum, existing wind turbine foundations, wind turbine towers, and the electrical balance of plant (BOP). Parallel avenues will likely exist for solar projects to meet the IRS criteria through strategic partial replacement of components rather than full replacement of all project infrastructure. 

Technical decisions

A key aspect of planning a repower is to decide which major components should remain and which should be replaced. In a repower scenario, components that are not replaced will be expected to have operating lives equal to the new equipment, which is probably beyond the initially planned operating life of the component. Any reused component must also be compatible with the new components. Technical considerations include: 

• Solar panels: Degradation of a projects’ power output can be mitigated by replacing some or all of the project’s solar panels. However, newer panels are heavier and operate at higher voltages, affecting the suitability of the project’s existing racking system and inverters. Detailed structural and electrical design reviews are needed to determine if solar panels can be replaced (and whether any additional upgrades or retrofits to the racking system must be made in tandem).
• Pile foundations: A facility’s pile foundations are critical to its ability to undergo repower. Owners must determine if any margin exists in the project’s pile design and current condition. Margin may come from lower in-situ corrosivity than expected, actual pile reveal heights being smaller than the maximum design height, or utilization ratios being designed to the worst-case (i.e., exterior row) conditions, causing interior piles that constitute the majority to have margin. A detailed review of the project’s structural design drawings and calculations can evaluate the extent of any margin and determine whether the racking system must be replaced, especially if the project’s solar panels are being replaced. 
• Power conversion systems: Voltage mismatch and grounding requirements must be taken into consideration when evaluating the need for and suitability of an inverter replacement. For the former challenge (i.e., voltage mismatch concerns), a DC:DC converter can sometimes be used to boost the DC-side voltage prior to the input of the inverter. A thorough review of the project’s PV array and MV collection system electrical design drawings (including a review of applicable single-line diagrams) can determine the current module- and string-level operating voltages. 

Technical considerations must also be made for various other major components and project aspects — including for the racking system, civil aspects, electrical BOP, interconnection, commercial and permitting aspects, operations & maintenance, and decommissioning. 

Jake Silhavy is a senior energy consultant at Sargent & Lundy, where he leads multidisciplinary teams in the development, financing, and construction of power plants and storage projects. He has managed dozens of independent engineering projects in support of tax equity and debt financing for renewable technologies, most notably solar PV projects. He has prepared useful life assessments to evaluate and inform sponsors and financiers of key considerations around projects’ operating life. Jake also prepares bankable energy yield and solar resource assessments, including degradation analyses, to improve energy yield forecasting over the asset’s intended operating life. 

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