Some of our team members have been operating in the solar industry for more than a decade – either in the role of O&Ms or alongside them. Today, they are in close contact with Solytic’s O&M clients, helping increase their efficiency.
Efficiency is generally top of the O&M’s mind as it directly impacts the profit margin, given you comply with Service Level Agreements (SLA). That begs the question, which tasks of the value chain should better be executed internally and which externally.
We asked our experienced employees as well as clients to share their thoughts. These five reasons emerged for O&Ms to pose the outsourcing question.
1. Outsourcing to sporadically extend your area of application
If in-house personnel dedicated to the respective area of application does not suffice to cover your entire portfolio of major customers, it should be supplemented by external, local O&M services.
“It makes complete sense for us to outsource local O&M duties for preventive maintenance, especially if the asset is small or geographically isolated from the rest of our portfolio. We make sure that our partners are trained, qualified and insured and also induct them into our systems and process and to date this arrangement has worked well for a small proportion of our service portfolio.” – John Davies, Founder and CEO of 2DegreesKelvin.
“With a 6h response time to a failure of an inverter, it is not economical for any company to send its own employee/service engineer to a PV plant with a journey of several hours.” – Johannes Dahl, Founder of powerdoo and Chief Sales Officer of Solytic.
2. Outsourcing to increase margins
This is an option for O&Ms who can have tasks performed by external service providers at better conditions compared to internal costs. Examples here are maintaining vegetation, cleaning modules or thermography checks.
“It makes total sense to us to outsource specialist services to industry leaders in their particular fields. These specialists have developed slick and valuable services over years, have the equipment and expertise to deliver excellence, so why would we struggle to develop these for ourselves and go through all the pain they did?” – John Davies.
3. Outsourcing when competencies do not exist
In other words, you hire specialists for skills you cannot exert yourself. Some of which include handling hardware unknown to you, ensuring security concepts or implementing and maintaining measures to conserve nature.
4. Outsourcing as a flexible backup for personnel
This is an effective alternative to permanently maintaining excessive internal capacities. Digital services allow project-based specialists to be deployed temporarily without losing quality.
“Running out of cash kills businesses, and therefore there is always a balance between employing internally or outsourcing externally. The outsourcing option for a consolidating and price focused market is the better option as your company grows, and then when you have enough pipeline and IP, then you can employ directly.” – John Davies.
5. Outsourcing to meet response times in line with SLAs
Non-compliance can result in contractual penalties and thus significantly higher costs.
“As aging assets tiptoe into a post FAC world, and PR guarantees are not accepted by O&M’s, it’s the response and rectification times which owners are focusing on. Partnering with local skilled and competent partners is a great way to minimise these responses and avoid LD’s.” – John Davies.