A case study from Ahana Renewables by Philip Williams, Director of Asset Management, Ahana Renewables
As the U.S. solar power industry continues to grow dramatically, many asset managers are experiencing growing pains from PV portfolio holdings that are expanding and diversifying. Often portfolio holdings are spread across multiple monitoring platforms, while operational and financial considerations typically demand standardization with a single provider (my own feeling is that it is impossible to successfully manage a portfolio with assets split among multiple platforms). Those who are adding bigger and more sophisticated systems may find they have outgrown historical monitoring platforms—or there simply may be a desire to upgrade monitoring functionality. The decision to review monitoring strategies may also be prompted by contract renewals with existing providers, or by occasions when field service is needed.
This was the situation we faced at Ahana Renewables (then Green Lake Capital) in 2012. We had made the strategic decision to monetize our portfolio. To do that we needed to do a thorough survey of our portfolio, find and correct any problems, and then validate asset health for potential buyers. However, because our fleet included legacy systems, system data was scattered among five different monitoring platforms. It was a time-consuming hassle to collect data from all systems into single reports, and impossible to see real-time portfolio data in one place. In order to improve our operations and to expedite our sale effort, we decided to standardize with a single monitoring provider. We ultimately green-lighted a migration project for 59 systems totaling 45.7 MW of production.
Fast forward one year and a half: With our portfolio assets consolidated onto a single monitoring platform, it was easy to share real-time portfolio data and analytics with potential buyers. What’s more, having all systems on a single platform was a great leap forward for our asset management efforts. With more administrative tasks grouped into a single software interface (one that had been customized to our specifications), we could show a lower cost of operations. These improvements were instrumental in the successful sale of our portfolio assets in December 2014.
Needless to say, transferring this many systems to a single provider was a complex job. In addition to questions of hardware compatibility and replacements, we needed to ensure a seamless transition for agency reporting and billing activities, as well as transferring historical data. We worked extensively with our new monitoring provider (AlsoEnergy) to achieve these goals, and to design and deploy the new software solution. This article draws upon our experiences to provide our Top Three Tips for other companies considering a portfolio migration to a single monitoring platform.
Background
Green Lake Capital began in 2009 as a captive equity fund to Borrego Solar Systems and was originally focused on financing Borrego Solar developed projects. Green Lake was established by Walsin Lihwa, the Taiwan-based parent of Borrego Solar. Over the course of four years Green Lake structured seven solar funds totaling $220 million in total developed costs and 45.7 MWs of nameplate capacity. The Green Lake portfolio was comprised of 59 sites in California, Massachusetts and New Jersey, ranging in size from 10 kW to 5.6 MW. After the final site in the portfolio received permission to operate at the end of 2013, the team turned our attention to monetizing the portfolio.
Through 2014 the Green Lake team explored all possible portfolio monetization options ranging from securitization to a cash-sale. At the end of 2014, after extensive review, Green Lake sold the portfolio to Atlantic Tele-Network (ATN), a publicly traded Telecom company based in Massachusetts. Founded in 1987, ATN specializes in providing digital wireless, wireline, terrestrial and submarine optic fiber lines in geographically challenging markets in the U.S., the Caribbean and South America. ATN purchased the Green Lake assets and also acquired the Green Lake management team to continue operating the assets as well as expand ATN’s new energy subsidiary Ahana Renewables. Realizing the financial and operational synergies of entering the distributed generation energy market, ATN and Ahana Renewables are committed to being the premier financial partner for distributed generation solar developers in the U.S. and abroad.
As the solar industry in the U.S. matures there will be more companies like ours who will be making the decision to consolidate holdings onto a single monitoring platform. Here are our Top 3 Tips for successful portfolio migration projects:
1. Be Flexible: Budget and Timing Will Change
Any time a colleague asks me for migration project advice, this is the first thing out of my mouth. Rigid budgets and schedules are simply not practical for large migration projects.
Migration projects tend to generate a large number of details requiring decisions or action from a range of agents. This will include individuals from your company and your monitoring provider, along with other stakeholders, contractors and third parties. The sheer number of details in your job may make it difficult to plan and execute on a strict schedule.
What’s more, these projects are dynamic by nature. Project scope can change quickly as sites are visited and historical hardware is assessed. Our migration project covered a number of sites that required troubleshooting, either for existing site issues or new communications technology.
Your new monitoring provider should be able to provide good ballpark budget numbers for your project. But fully refined numbers may only be available after a lengthy process to scope integrations with hardware you want to keep, as well as determining software features and functionality desired on the new platform. Other administrative details that may affect project scope include transfer of historical data across platforms, along with transitioning alert functionality, agency reporting, scheduled stakeholder reports, and other custom configurations on the new software.
For large portfolio migrations, you may find that you have to select your new monitoring provider based on a project estimate rather than a project quote. The Ahana migration project was broken into three batches that were scheduled and budgeted separately. So we green-lighted our migration project before we had a firm total quote for budget and schedule. If you are doing your own migration cost analysis, I can only caution you that your budget and timing will almost certainly change over time.
That being said, I can offer the following advice to those planning a migration budget. This advice may help you avoid budget and schedule pitfalls as you plan your own migration project.
First of all, be prepared for the research challenge as you gather needed information about each site. Missing or inaccurate commissioning records can be a common obstacle, particularly for older systems.
Even if you try to eliminate the biggest hardware variable by planning to replace all DAS units, your new monitoring provider will likely need detailed information about other hardware on site, including environmental sensors and inverters. This information not only determines what hardware may need to be replaced, it also determines what new hardware may be needed in order to accommodate the requested feature set in your new monitoring platform.
In the best case scenario, the information is already recorded in your asset management documentation. In a good scenario, you can track down sufficient site information quickly from your EPC or O&M provider. In a worst case scenario, you may have to consider site visits just to gather needed information about existing monitoring system hardware.
My second piece of advice is a cautionary tale. As large projects move through a workflow, there can be pressure at every point to rush the project through to the next stage. Contractors are always eager to collect a check and move on. Your team and the monitoring company both want to make their deadlines, and nobody wants to be perceived as holding up progress. (At NASA, where huge projects are the norm, they use the phrase “go fever” to describe the group behavior tendency to rush to launch.)
Don’t succumb to this pressure to finalize system transfers to the new monitoring platform before full site information has been gathered and reviewed. You should also have a definite plan for what you want on the new monitoring platform before you begin deployments.
The single greatest variable in your migration project cost is trips to the site. Every time you roll trucks to the site you will be adding hundreds or thousands of dollars to the project bottom line. One of your primary objectives as a project organizer is to consolidate trips to the site and avoid cost overruns. Since most site migrations require at least one site visit, do your best to make sure no task is overlooked.
Here are a few especially sneaky problems you should consider to avoid return visits to site:
Does existing weather station hardware provide correct data to support proposed functionality on new monitoring platform? Most monitoring platforms perform calculations using available irradiance and other environmental data to create benchmark values for system production. Of course, results can vary significantly with the accuracy and types of environmental data available. If you expect the new monitoring platform to enhance your performance analytics, it may be that you will also need to re-calibrate or upgrade your environmental sensors.
Do cellular modems on site need to be redirected or replaced? If you are switching the DAS at a site, there is no guarantee that your existing cellular data solution will work with the incoming DAS technology. If a new cellular data plan is part of your migration agenda, do your best to ensure in advance that the carrier has sufficient signal strength at the installation site to accommodate your data transmission needs.
Plan for thorough site commissioning when you switch to the new platform. This is good advice for any monitoring system deployment. The process to fully verify incoming data on the new platform can take hours, and troubleshooting is not uncommon. If your migration schedule optimistically projects quick site commissioning, you are likely to be disappointed.
Finally, for those who may be trying to scope their own migration projects, here is our comprehensive list of items that can affect schedule and budget (prepared with help from Holden Caine, CTO of AlsoEnergy):
Hardware
- What existing monitoring hardware can be used with the new platform? DAS? Meters? Weather station/environmental sensors?
- Does the new platform communicate well with all inverter technology across the portfolio?
- Does the new platform communicate well with zone and/or string metering technology in the portfolio?
- Is any new hardware required in order to accommodate desired functionality on new platform?
Software
- What software functionality is desired on new platform?
- What data needs to be included in your regularly issued reports? What data needs to be included in various custom screen displays for your own team, and for any other stakeholders with software access?
Historical Data Transfer
- How much historical data do you want to transfer to the new platform?
- Can the new platform accommodate all types of historical data you want to transfer?
- Is there additional site information that must be transferred to the new platform, such as rate schedules, maintenance records, wiring diagrams, and other site documentation?
Integrations
- Will new platform need to share data with any client or third party databases, or with any third party software programs?
- Any special requirements for data security?
Possible Administrative Concerns
- Performance guarantees
- Agency reporting
- Scheduled internal reports for stakeholders
- Invoicing and billing activities
- Lobby kiosk displays
- Transfer of baseline production values, user permissions, and other customer-defined variables in your historical monitoring platform
- What alert/alarm functionality needs to be transferred to the new platform for each system?
- Are any changes needed for cellular modems and data plans?
2. Commit to Project Management
Simply put, the Ahana Renewables migration effort would not have been possible without dedicated project management. That required a commitment to personnel resources, both from Green Lake Capital and from our new monitoring provider. That also involved creating project infrastructure, such as regular meetings and reports, as well as master spreadsheets to share information and track progress. Getting your new monitoring provider to agree to this sort of project structure in advance will help ensure good communication and good results.
In order for projects this big to stay on track, it is critical to have clearly defined project “ownership” roles. Green Lake Capital named one individual to head up migration efforts for our team, and our new monitoring provider also designated a project leader. These Project Leaders managed internal workflow for each team, and each served as the primary point of contact for communication between the teams.
Beyond this, both companies agreed to three key elements of project infrastructure: weekly meetings, weekly reports and a protocol for shared documentation.
Weekly Meetings: We agreed to schedule weekly meetings with our new monitoring provider over the duration of the migration project. Project Leaders managed the meeting for each team, with other staff members participating when needed. The list of items demanding communication between the teams justified this weekly meeting schedule, and we generally found enough content to fill an hour. I believe this weekly ritual was a key factor in our project success.
Weekly Reports: Weekly reports were an internal protocol at Green Lake Capital to ensure that managers and executives received weekly updates on the migration project. As the Director of Asset Management, I received weekly reports from the Project Leader on our team. With a full plate, I found the Project Leader’s weekly reports incredibly valuable; they allowed me to quickly see the status of the project and highlighted key issues that needed my attention.
Shared Documents: But perhaps the most important single item of project management infrastructure was the Master Project Spreadsheets that we shared between the two teams. (We had multiple spreadsheets only because our migration project was broken out into batches.) This protocol for shared documentation created a single source for all stakeholders to access the most current and authoritative project information on a site-by-site basis. With both teams using the Master Project Spreadsheets as primary project documentation, our two companies literally stayed on the same page.
Organization was key for these spreadsheets, and each team put a lot of thought into the structure of the document. There were separate worksheets devoted to notes and records for existing hardware vs. newly installed devices. Our new monitoring provider used the spreadsheets to document progress deploying software features. It was particularly helpful to have administrative matters documented here as well, including agency reporting requirements and due dates, along with relevant contract terms from historical monitoring providers.
3. Embrace the Opportunity to Improve Future Operations
Migrating systems onto a consolidated monitoring platform presents a range of opportunities to improve future operations. Of course you will see greater efficiency in your operations simply by consolidating your fleet onto a single platform. There will also be planned opportunities to implement preferred workflow as you design features and functionality with your new monitoring provider.
But there will also be dynamic opportunities for improvement that will arise over the course of the project; even unexpected problems can present opportunities to refine an operational model. Resist the urge to quickly push through project decisions for the sake of expediency.
Opportunities to improve operations begin with your selection of a new monitoring platform. As you evaluate prospective monitoring providers, you should have a clear vision of the workflow you would like to implement for future operations. Define your ideal operational model, and communicate that vision to your monitoring candidates. You should also communicate any pain points with your current operations. Even if you don’t have a conceptual solution, monitoring providers may have addressed similar concerns for other clients.
After you have selected a monitoring provider, there will likely be a new round of audits for each system in your fleet in order to fully scope the project and begin implementation. You will be looking in detail not only at performance data, but also at administrative records and contracts, as well as commissioning logs. You will seldom spend this much time with your portfolio data and documentation; additionally, you will have the benefit of the fresh perspective of your monitoring provider. Take this opportunity to thoroughly audit each system. You may find unexpected surprises.
This is also a good opportunity to cross-reference results across your portfolio. You may find occasion to standardize on procedures or performance models that are producing the best results in your fleet… or you may identify performance patterns following unexpected variables for system locations, hardware configurations, by contractor, etc. In our case, the opportunity to review results in the new monitoring platform was an occasion for ownership to take a fresh look at the possibilities for generating real-time generation baselines using on-site irradiance data. This impression directly led to a decision to install weather station equipment at all sites, which has given our O&M team greater power to analyze performance and deliver ROI.
As your new monitoring is deployed, you will face more software customization decisions on many scales; from particulars (alert thresholds, user permission levels) to broad strokes (automated report content and scheduling, portfolio analytic displays). You will be creating new workflow conventions for yourself and for your team, and potentially for contractors and other project stakeholders as well. Each one of these decisions is an opportunity to establish more efficient business practices.
For Anaha Renewables, this was an opportunity to connect our generation data with our accounting. Our new monitoring provider offered all-important PPA invoicing tools, allowing us to bring billing and accounting activities onto the monitoring platform. With this upgrade, we no longer have to export production data from multiple platforms then upload into third party accounting software.
Before we standardized on a single platform, common administrative tasks like accounting, agency reporting, performance guarantees, and internal reports were scattered among a host of monitoring platforms and software programs. The new monitoring platform has provided a complete asset management infrastructure, leading to tremendous time savings. The whole system has been a huge step forward for our team.
In closing, I hope this article has provided helpful advice for those who are planning their own portfolio migration projects.
If you are considering the prospects for consolidating your systems onto a single monitoring platform, I can tell you that Ahana Renewables has been very pleased with our results. As asset owners, Green Lake Capital found a worthwhile return on our migration project investment. The new monitoring platform helped us validate the strength of our portfolio and facilitate our monetization strategy.
As an asset manager who still supervises these systems on the new monitoring platform, I also see a huge return on that investment in the time and money I now save with streamlined efforts for O&M, invoices and billing, reports, and other administrative duties.
This is a good time to consider a moving to a standardized monitoring strategy with a single provider. Market forces are stabilizing, and dominant market players are emerging. Asset owners and managers can now make confident predictions regarding long-term portfolio revenues and costs of operation. It is more possible than ever before to make definite plans for the future.
At Ahana Renewables, years of experience that began with Green Lake Capital had forged a well-considered system for O&M and PV performance evaluation. For us, it was the right time to take our winning formula and standardize it across the fleet. We are saving time and money using a single asset management platform, and it allows us to be confident in the long-term health and value of our assets.
