PV System Derates Explained

During a recent 5MW project system model review with a finance entity that is relatively new to PV systems, a question came up about why the system DC nameplate (5,867kW) was higher than the system AC nameplate (5,000kW). My answer about derates was met with blank stares and shifting chair posture.

The PV industry and its financing partners rely on simulation modeling software, which provides a fairly accurate multiple year forecast of energy production and economics, including financial payback. These models are thorough, sophisticated software packages which take into account the many variables which affect a PV system’s performance including weather, environmental conditions, technology and product performance, government subsidies, and cost of money among others.  Providers include the NREL SAM Tool, PVSyst, and RETScreen among others.

Derates are a key variable addressed in these simulation programs. Derates are the various locations and instances in a PV system where power is lost from DC system nameplate to AC power. This includes inverter loss, resistive factors, environmental conditions and issues relating to maintenance.  A list of derates considered in a simulation model below shows that derates are both in front and after the inverter and occur throughout the system.

Solar energy PV derate

Derates look at a component and then attribute a known or estimated negative impact on that component.  For example, an inverter performance rating is given a value of 100% and then factors in a 2% loss for an estimated performance of 98% of actual. Derates can vary widely depending on array, location, environmental conditions, and product variances, to name a few.

A few explanations of the derates listed above:

  • PV Module mismatch – module mismatch is a result of slight manufacturing inconsistencies where modules of the same size are not identical. Current/voltage characteristics vary slightly from module to module.  This results in a module string (multiple models connected in series) which operates at the output level of the lowest performing module in the string.
  • DC Wiring – accounts for resistive loss between the modules and the inverter.
  • AC Wiring – accounts for the resistive loss between the inverter and meter.
  • Soiling – this is an issue that can be minimal or severe depending on location – dust, wildlife droppings, leaves etc.
  • Inverter/Transformer – losses due to power inversion from DC to AC.
  • Shading – due to structures or other nearby objects.
  • Availability – system availability takes into account system maintenance and utility outages, both of which result in down time. Industry standard is approximately 7 days per year.

The overall derate or Performance Ratio (actual AC power yield vs. target DC power yield), for most larger systems are usually in the 75% – 80% range.  Keep in mind that this modeling is based on Standard Test Conditions (STC), which is a laboratory standard of near perfect insolation (incoming solar radiation) and environmental conditions, which rarely occurs. While the model takes into account the derate factors and a detailed weather history for a given location, its important to note that annual fluctuations in weather conditions is an important variable which can be significantly different year to year. Overall, simulation models are quite accurate and are a fairly good gauge for finance companies to make an informed investment decision.

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