Risk Mitigation for Floating Solar PV projects in Asia
This article provides a brief review of key risks identified during development of a floating solar project in Asia; and mitigation mechanisms.
FPV, also known as floatovoltaics, is a solar PV application in which PV panels are designed and installed to float on waterbodies such as reservoirs, hydroelectric dams, industrial ponds, water treatment ponds, mining ponds, lakes, and lagoons.
Floating Solar PV has been gaining traction because it has certain distinct advantages over land-based solar PV system:
1. Utilization of unused space of water bodies: One of the biggest advantages of floating solar panels is that the installations do not require valuable land space. Such projects utilize the unused space on bodies of water.
2. Improved possible solar panel performance: Due to high temperatures solar panels suffer from decreased power outputs. Wind circulation over the PV modules provides a cooling effect, which can improve the performance of solar photovoltaic panels depending on the site wind conditions (note: site specific).
3. Environmental benefits: Floating solar panels can help reduce evaporation because of floats covering the water surface area and by limiting air circulation and direct sunlight over the water’s surface. The reduction of sunlight also helps prevent algae blooms, which pollute water and raises treatment costs (note: site specific).
At present, among the 60+ countries actively pursuing the deployment of FPV and more than 35 countries are home to an estimated 350 operational FPV systems, with a cumulative capacity of approximately 1.6 GW. Although still considered a niche, FPV is projected to experience an average growth rate of above 20% in the coming five years.
As more large scale FPV system are being developed, it is imperative that developer do their due-diligence before setting up the FPV system. The risks for FPV project are multitude ranging from inexperience at the hand of the developer, to site specific problems, technical issues, regulatory problems and permitting issues — all affect the financial and technical viability of a project. In the end, failure to develop projects at some point in the development process comes at considerable cost for the project developer as well as the industry as a whole.
Given below with the steps that can be taken to mitigate those risks.
Source: YOG INFRA analysis
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YOG INFRA is an infrastructure focused financial advisory firm committed to support sustainable economic growth driven through infrastructure development. With our offices in Singapore and India, we work with Development Finance Institutions (DFIs), Private Sector and Government Agencies; and have a strong focus on Asia.