Utility-scale PV system valuation: financial audit checklist
PV monitoring in compliance with IEC 61724 standard “Class A” enables financial auditors and owners to claim the highest possible value of assets
When valuating PV assets, auditors may ask owners for both a “cost”- and an “income approach”. In both valuations the performance and degradation of the PV system play a large role. Performance is quantified using Performance Index (PI). Measuring PI with a higher accuracy results in:
- higher PV asset valuation: lower risk, better bankability
- earlier identification of underperformance and of hidden asset deterioration
- prevention of unjustified value assessment (also in the special case of acceptance testing)
PI is measured by comparing incoming solar radiation to generated electrical output. Best practice is to do this in compliance with the latest IEC 61724:2021 standards. However, many systems are still monitored according to the old (pre-2017) low-accuracy requirements of IEC. These qualify as “Class B” at best according to the most recent version of the standard. If you want to benefit from “Class A” accuracy, then your solar and electrical monitoring systems and their maintenance must comply with IEC’s requirements. This note explains the importance of high-accuracy “Class A” monitoring and offers a checklist for financial auditors.
Introduction
The valuation of photovoltaic (PV) assets typically relies on a combination of the cost approach, income approach, and market approach. Each method offers a distinct perspective: from the investment required to build a new system and its present value, to the revenue it generates, to how similar assets are priced in the market. Together, they form a basis for financial evaluation and risk assessment. To support such valuations with objective performance data, the IEC 61724 group of standards contains requirements and best practices for monitoring and reporting PV system performance. Compliance with the latest version of the IEC standards results in the best accuracy data and best bankable reports.
In 2017, the IEC requirements for utility-scale PV system performance monitoring changed significantly. However, many PV systems are still monitored according to the old (pre-2017) low-accuracy requirements of IEC
- Since 2017, asset managers and their financial auditors aim for compliance with the high-accuracy “Class A” requirements.
- Many O & M organizations still report data based on monitoring systems according to the pre-2017 IEC 61724 edition of 1998. These systems now qualify at best as “Class B”.
- PV system owners can order new monitoring systems and their maintenance to attain Class A monitoring.
- PV system owners can upgrade existing monitoring systems and maintenance to attain Class A monitoring.
This document explains the latest IEC 61724 1:2021 standard for PV system performance, PV performance indicators, and provides a checklist to verify compliance of monitoring systems with the latest requirements of “IEC 61724 1 Class A”. It aims to give objective information about the application of this standard. Comments are welcome at [email protected]
Performance indicators in PV
There are several performance indicators that form the basis of PV performance reporting and valuation of PV assets. The first edition of IEC 61724 1: Photovoltaic system performance monitoring – Guidelines for measurement, data exchange and analysis –, dates from 1998. It was the basis for the calculation of the main performance indicators for PV power plants:
- Performance Ratio (PR) is the ratio of measured output to expected output for a given reporting period based on the system name-plate rating.
- Performance Index (PI) is the ratio of measured output to expected output for a given reporting period based on a more detailed model of system performance than the name-plate rating.
Why invest in high-accuracy monitoring?
High-accuracy monitoring adds value to asset management. For financial reporting, measuring PR and PI with a higher—Class A rather than Class B—accuracy results in:
- attribution of a higher value to the same asset, resulting in more favorable financing
- a lower-risk, better bankable valuation
- earlier identification of underperformance and otherwise hidden asset deterioration
- prevention of unjustified value assessment
- improved directions for maintenance
Impact of uncertainty on accurate PI measurements for PV systems
The central issue is that PI measurements are not as accurate as financial asset managers would prefer, even if the monitoring equipment and the maintenance of this equipment is of the highest level (Class A).
To put uncertainties in perspective: PV system degradation may be budgeted in financial models at 0.5 % to 2 % per year. Furthermore, in acceptance testing of PV systems, a 1 % error in PI may have significant impact. PI and PR measurements are less accurate than that.
The main factors that limit the accuracy of PI measurement are environmental:
- estimates of the solar radiation falling on the modules
- correction of their performance for module temperature
- correction for soiling
PI and PR estimates using Class A monitoring can have an uncertainty of 3 % at best*. This relatively high uncertainty must be taken into account when valuating the PV power plant.
It is reasonable to assume that Class B monitoring results in a 3 times higher uncertainty, in the order of 9 % (using ISO 9060 Class C pyranometers). IEC assumes that this 9 % is unacceptable to managers of valuable utility-scale PV power plants. Class B uncertainty forces owners to work with higher safety margins on the estimates of performance indicators and, thus, significantly lower asset valuations.
NOTE: a significant part of the uncertainty may be attributed to systematic, fixed percentage errors. Detection of day-to-day and year-to-year changes and system degradation may have a lower uncertainty.
Checklist
Use the checklist in Table 1 to verify compliance of your PV monitoring with IEC 61724‑1.
Table 1 Checklist to verify compliance of monitoring systems with the requirements of IEC 61724-1 Class A.
* Source: 2025 draft IEC 61724-2, indication of PI uncertainties attainable using Class A pyranometers.
| IEC 61724-1 CLASS A REQUIREMENT | COMMENT | |
| IEC compliance | Check if conformity of both hardware and maintenance to “IEC 61724-1 Class A” is confirmed?
If not, then monitoring is “IEC 61724-1 Class B” or not conforming to IEC at all
Criteria for conformity can be found below | Only stating “IEC 61724 compliance” is insufficient and not allowed. (IEC 61724-1 clause 4) Conformity declarations referring to IEC 61724-1 must state the system Classification; either “IEC 61724-1 Class A” or “IEC 61724-1 Class B” |
| Solar irradiance | Are all pyranometers heated?
Are there 2 pyranometers (Class A) per measuring station (one POA and one GHI)? Are they aligned within 0.5 ° tilt to their intended plane?
Suggestion: add a list of model identifiers with serial numbers (can be found in memory register of digital pyranometers) | Required since 2017 for Class A: heating for dew and frost mitigation, i.e. heating, of pyranometers. (The exception for situations where dew and frost are expected less than 2 % of the time is rarely used because evidence must be submitted; for several days of capacity testing the risk is not worth taking)
Older sensors like Hukx SR20, Kipp & Zonen SMP10 or EKO MS-80(S) are not heated and do not comply. |
| Calibration Solar irradiance and other sensors | Are all pyranometers calibrated in the last 2 years?
Are other sensors calibrated per factory recommendation?
Suggestion: add a list of calibration dates per model and serial number (can be found in the memory register of digital pyranometers) |
|
| Cleaning Solar irradiance | Have all pyranometers been cleaned every week?
Suggestion: add a list of cleaning records per monitoring station (can be found in memory register of the meteorological station, if this has a maintenance button) | Dirt accumulation on pyranometers, also called soiling, is a large source of measurement uncertainty.
|
| Module temperature | Are there at least 3 module temperature sensors per monitoring station? | Uncertainty: ± 1 °C or better. |
| System inspection | Has the total system been inspected in the last 12 months? Have front-side irradiance sensors been inspected weekly?
Suggestion: add a reference to an inspection report | |
| Soiling measurement | Are soiling measurements performed?
Suggestion: add a list of model numbers with serial numbers (can be found in memory register of digital soiling sensors) | As the measurement is not required for the PR and PI calculations, we expect these on the minimum required number of stations only, unless non-uniform soiling is expected. |
| Electrical output measurement voltage and current | Are voltage and current measurements (AC and DC) accurate within 2 %? Do power measurements comply with Class 0.2S (IEC 62053-22) and Power Factor measurements with Class 1 (IEC 61557-12)?
Suggestion: add a list of model numbers with serial numbers | |
| Minimum number of monitoring systems on a PV power plant | Does the number of stations comply with the minimum required? < 40 MW at least 2 stations 40 to 100 MW at least 3 stations 100 to 300 MW at least 4 stations ≥ 300 MW 5 + 1 station per additional 200 MW | In practice, many more stations are installed. For details, see our separate memo: IEC 61724-1 2021 how many monitoring stations for utility-scale PV power plants? |
| Optional: other parameters | Is rainfall, ambient air temperature, wind speed, wind direction measurement performed for every monitoring station? Suggestion: add a list of model numbers with serial numbers | As the measurements are not required for the PR and PI calculations, we expect these on the minimum required number of stations only. Ambient air temperature: uncertainty: ± 1 °C or better. Wind speed: uncertainty: ± 0.5 m/s or better for wind speeds under 5 m/s and lower than 10 % of wind speed for higher wind speeds. |
| Optional: reflected solar radiation | Only if the system is bifacial: is there either 1 downfacing pyranometer or are there 3 rear-side plane-of-array pyranometers per measuring station? Suggestion: add a list of model numbers with serial numbers (can be found in memory register of digital pyranometers) | Class C pyranometers may be used. |
Optional: tilt measurement | Only for systems with one-axis trackers: is there a tracker tilt measurement per station with at least 1.0 ° accuracy? Suggestion: add a list of model numbers with serial numbers | Digital pyranometers may include a tilt sensor. Sensor data can then be found in its memory register. |
| Data processing and quality | Are data collected with at least one data point per minute? Are invalid readings removed? | |
IEC 61724 group of standards
IEC now uses 1 Standard and 2 Technical Specifications (TS) for PV system performance testing. Technical Specifications will normally become Standards within a few years.
- IEC 61724-1 standard for “monitoring” gives requirements for monitoring systems. The 2021 revision defines performance data that may be collected, and the data review process, but does not specify how to analyze this data
- IEC TS 61724-2 TS for “capacity evaluation method” defines performance analysis based on the monitoring data, collected over a short period of several sunny days, typically during commissioning and typically to verify if the system meets specifications
- IEC TS 61724-3 TS for “energy evaluation method” defines performance analysis based on the monitoring data over a long period of one year or more
In detail: latest updates to IEC for higher accuracy
The 2017 edition of the standard is very different from the 1998 version. In particular, since 2017, much higher accuracy “Class A” monitoring is recommended for utility-scale PV. Pyranometer uncertainty requirements have also changed.
Despite the slight changes in the latest 2021 version compared to the 2017 version, the consequences are important. The 2021 version of the standard recognizes that solar irradiance measurement is one of the weakest links in the measurement chain. This recognition drives the need for higher accuracy in performance measurements, increasing the demand for more reliable data. This is crucial for financial asset managers, stakeholders, and equipment, potentially leading to better overall PV system performance.
The latest IEC 61724-1:2021 standard includes:
- 2 accuracy classes, A and B for monitoring systems, used in conformity declarations
- accuracy requirements for monitoring equipment per class
- required quality checks (i.e. instrument calibration, maintenance/cleaning) per class
- recommended minimum number of instruments used depending on the PV system scale
- new in 2021: requirements for rear-side irradiance or albedo measurement (for bifacial PV systems)
- new in 2021: requirements for tilt sensors included (for systems with trackers)
In detail: Added value of Class A in acceptance testing of PV systems
Owners of PV power plants typically pay their subcontractors partly after a short test on several sunny days and a final payment after 2 years of operation. Agreements are usually based on the PI measurement. Class A high-accuracy PI measurements as opposed to Class B:
- offer the most solid reference
- prevent long discussions and conflicts
- lower the risk of unjustified payment of liquidated damages
- lower the risk of unnecessary asset depreciation
In detail: IEC “Class A” utility-scale monitoring: best attainable level of accuracy, reducing the risk profile
For utility-scale monitoring, the 2021 version of the IEC standard suggests using “Class A” systems. This “Class” is an “accuracy class”. Class A is the most accurate class.
Conformity to Class A provides a standardized approach to attain the best possible measurement accuracy, particularly for the 4 main parameters from which the performance indicators are derived:
- solar radiation
- module temperature
- voltage
- current
The accuracy of Class A monitoring systems is kept at a high level by a combination of:
- high-accuracy instrumentation
- frequent cleaning/inspection
- frequent calibration
- redundancy in measuring systems; having multiple systems at the power plant
- data review
In detail: What is an accuracy class?
IEC 61724-1:2021 defines two accuracy classes for PV monitoring systems: Class A and Class B. The concept of an accuracy class is defined by the International Vocabulary of Metrology (VIM), as “class of measuring instruments or measuring systems that meet stated metrological requirements that are intended to keep measurement errors or instrumental uncertainties within specified limits under specified operating conditions”. The idea is that compliance with an accuracy class is sufficient to claim a certain measurement uncertainty based on comparison to systems of the same class.
In detail: How many monitoring systems per PV power plant?
There is a large difference between IEC 61724-1 recommendations and Hukx’s observations of common practice. IEC recommends 2 stations for a system below 40 MW, 3 for a system between 40 MW and 100 MW, and 4 for a system above 100 MW with an additional system for every 200 MW above 100 MW installed capacity.
Hukx interviewed its worldwide users and observed many more stations at PV power plants than recommended by IEC.
In a nutshell, Hukx observes for a PV system above 20 MW:
- 3 monitoring systems as a minimum
- above 50 MW, 4 systems with one system added for every additional 30 MW
For details, see our separate memo on the subject: How many monitoring stations for utility-scale PV power plants?
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