...

In this example, the cumulative production degradation over a 20-year lifetime would be 19 x 0.7% = 13.3% meaning that in Year 20, the production would be degraded by this amount on a year-to-year basis.

Production degradation impacts

Solar energy system annual production degradation affects quotes, proposals, and contracts in the following ways in Sighten:

1. Reduces the annual estimated energy production in future years, as displayed in Sighten proposals
2. Financial impacts in solver and quoting process - lower production in future years due to degradation will affect financial model accordingly, including:  
   1. Payments over time (e.g., future year's estimates)
   2. Post-solar utility bill
   3. Future year's cash flows
   4. Solar savings, return on investment, and payback calculations

Contractor degradation configurability

...

How is production degradation set on the platform?

There are 4 ways production degradation is set on the platform. The degradation can be set by: a financier, module, organization, or Sighten default. We'll discuss them according to their level of hierarchy and how they are configured:

1 Financier degradation configurability

A financier can designate a fixed degradation rate for the lifetime of their financial product. If a financier has elected to configure a specific degradation rate for their product, that rate will supersede the degradation rate set by the organization. Financing product degradation rates may vary from one financial product to the next, depending on the financier's configuration. For example, the default degradation rate for cash purchase quotes is set to 0.7% per year but a financier may have set it to a different value for their solar financing product. This only impacts our integrated financing products. All other products will use the organization's degradation rate unless a module-specific degradation rate is set for the modules used.

Note that production degradation rates are static for all years of the financial product's lifetime. That is, Year 2 degradation rate is the same as all subsequent years. Also this is only applicable to financier production calculations.

Please contact your Sighten Account Manager and/or submit a request to Sighten support to revise this value.

2 Module-specific degradation configurability

We can configure the degradation rate based on what is stated on a module's spec sheet. 

To revise this value, please submit a request to Sighten support or your account Manager with the spec sheet where the said degradation value is indicated. Note that this configuration will override any set degradation for your organization and Sighten's default 0.7%, with the exception of financing products with a set degradation value.

3 Contractor degradation configurability

Production degradation rates can also be configured per organization. Note that an organization's set degradation rate will only be applied to jobs without module or financing product-specific degradation rates.

To configure the production degradation for your company, please contact Sighten support at support@sighten.io and submit a request. To configure the production degradation rate for integrated solar financing products, please contact the financier's representative and submit a request. 

Financier degradation configurability

Since production degradation rates are configured by financial product, a financier can designate a fixed degradation rate for the lifetime of their financial product. The default value is set to 0.7% per year but can be revised to a different value. Please contact your Sighten Account Manager and/or submit a request to Sighten support to revise this value.

...

4 Sighten-default degradation rate

By default, all degradation rates on Sighten are equal to 0.7% .

Production degradation impacts

Solar energy system annual production degradation affects quotes, proposals, and contracts in the following ways in Sighten:

1. Reduces the annual estimated energy production in future years, as displayed in Sighten proposals
2. Financial impacts in solver and quoting process - lower production in future years due to degradation will affect financial model accordingly, including:  
   1. Payments over time (e.g., future year's estimates)
   2. Post-solar utility bill
   3. Future year's cash flows
   4. Solar savings, return on investment, and payback calculations

Related articles

You might also want to check out these related topics:

...