Floating solar: the changing landscape of solar energy

  • Taiwan applies specific FITs for FPV plants; these are higher than FITs for ground-mounted PV systems. In 2021, the FIT for ground-mounted PV projects was NTD3.7236 per kWh, whereas for FPV panels, it was NTD4.1204 per kWh
  • In 2018, Massachusetts implemented the Solar Massachusetts Renewable Target (SMART) programme that allocated a location-based compensation rate add-on of USD0.03 per kWh (1–80MW) for FPV projects
  • Also in 2018, South Korea fixed an obligatory renewable service supply ratio for power producers with installed generation capacity of 500MW or more. Under this mandate, 6% of their total power generation must be through renewables. Based on the scheme, a weighting of 1.5 is applied for FPV installations compared with 0.7 for land-based systems
  • Eliminates costs associated with land acquisition and site preparation
  • Improves performance of solar projects, as shading effects are reduced
  • Ensures larger installed capacity per unit area
  • Reduces costs and increases operational benefits if co-located with hydropower projects
  • Reduces water evaporation, increasing the availability of water for other applications
  • Reduces costs associated with waterbody maintenance (as it reduces algae growth)
  • Converts underused space into revenue-generating space
  • Challenges due to varying water levels, reservoir depth and bed type, and extreme climatic conditions could increase the capital expenditure requirement (to more than that required for a ground-based solar PV power plant)
  • The project base is subject to constant friction and mechanical stress due to its constant movement on the water body. Poor design could lead to catastrophic project failures
  • Projects also are prone to corrosion and degradation due to moisture. Hence, it is critical to select PV components based on the body material, so they can last for about 25 years in harsh weather conditions
  • Deep-dive technical due diligence is needed to assess suitable island and anchoring design, commercial viability and technical feasibility
  • UK: The Queen Elizabeth II and Godley FPV plants sell their electricity to a local water-treatment facility, and the surplus is injected to the grid. Both FPV plants were commissioned under the UK’s renewable power obligation scheme
  • China: The majority of megawatt-scale FPV power plants in Anhui Province is built under the Top Runner Program. The electricity produced is supplied to local power companies at a rate determined through competitive bidding

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Acuity Knowledge Partners

Acuity Knowledge Partners

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We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/