Managing A Photovoltaic System or Portfolio Efficiently

Managing A Photovoltaic System or Portfolio Efficiently

What is important for the management of individual photovoltaic systems and what is important for portfolios? What should be self-managed and what should be outsourced to external service providers? Find out how to make good decisions from your perspective as an operator.

Direct investments in photovoltaic systems are like real estate: you have to actively take care of them in order to make a good investment out of them. Clear goals, an organised structure and a realistic assessment of the situation and your own abilities provide you with the right orientation.

On the market you will find countless services and technical solutions for the management of photovoltaic systems. But how to tell which one you really need? An excessively complex photovoltaic system management can quickly become expensive.

If you have to spend too much time managing it yourself, it also costs a lot – time, energy, nerves. For individual systems or portfolios, the right level of involvement depends on various factors, such as the size of the system, ownership structure, location of the system and forms of compensation.

Management approaches

The general guideline for the management of photovoltaic systems is a balanced cost- benefit ratio, with which you generate decision-relevant information and use it for optimization. To make the best use of your resources, you should optimize the monitoring and controlling processes related to your investment.

Depending on the size of your investment, the following management approaches can be considered:

Doing everything by yourself with the least possible effort

You focus technically and commercially on what is absolutely necessary. With smaller individual investments, there is usually no financial leeway with which additional expenses could be refinanced.

Do everything yourself by using cost-effective decision-making support

For example, you can use the monitoring provided with the inverter, build Excel tables or use free asset management tools.

This type of support for your investment is suitable for individual installations by optimising potential or small portfolios where there is little financial scope for additional expenditure.

The small investments serve to maintain the value or to optimise the yields.

Do it yourself, but outsource it selectively

You retain control of the management. To do this, you rely on precise technical and commercial benchmarking. You only invest in monitoring tasks if you receive very precise decision support. The benchmarks and the resulting decisions are additionally professionally secured by the know-how of the service providers.

The costs and processes have a good cost-benefit ratio between your own time and the expenditure that has been invested to maintain value, optimise returns or process effectiveness. This strategy is suitable for large individual investments, portfolios or owner communities.

Outsourcing entirely to external operators

They assign the technical and commercial management to third parties. They monitor technical performance, keep an eye on benchmarks and are allowed to make their own decisions within contractually defined margins.

An external management is particularly suitable if you lack the necessary expertise or time. This can be the case with large systems, portfolios and complex ownership structures.

In addition to size, the reporting requirements play a role in selecting the right approach. Banks or investors in more complex ownership structures expect regular reports on the performance of their investment.

Economic efficiency

Basically, it is important that you include the value of your own working time (the opportunity costs) in your considerations when managing photovoltaic systems. In general, short-term cost optimization usually comes at the expense of long-term profitability. If you invest too little – for example, in maintenance or necessary cleaning – this can get on your feet in the form of reduced yields or repair costs.

The profitability of a partial or full outsourcing to service providers depends heavily on tailored target agreements and the pricing model of the providers. Service providers usually focus more on what they are paid for and less on what makes sense for the operator in the long term.

Management practices

There is no blueprint or a single correct way of management, but there is photovoltaic management that fits your own objectives. For example, if you want to save taxes, generate the highest possible return or maintain the value of your assets, you need to focus on different areas.

Since the market conditions and your own life situation are constantly changing, it is good to continuously question your goals and strategies. For example, it could be that, in addition to your professional core business, you are initially dependent on the know-how and time saved by external service providers. It is also possible that you are becoming increasingly familiar with operators’ practices and decide to shift the focus of your work.

Key points of a management strategy

  • Define the goal: what do you want to achieve with your investment and what is required to achieve it?
  • Evaluate resources: which temporal, professional and monetary resources are available to you?
  • Weighing it up: how do you use your resources most effectively? Do you have the know-how? Is a service profitable? Do you have the time or do you want to spend the time?
  • Maintain flexibility: are the selected solutions adapted to my portfolio development and adjust my expectations?