Path-Q Solar
How should a small business estimate the cost of solar downtime when it must buy replacement power or suspend a revenue-producing process?
Answer
Calculate replacement-power expense and process-related economic loss as separate components for each downtime scenario. Use actual power requirements, replacement-power prices, lost contribution margin, restart costs, waste, labor, and contractual effects rather than using the electricity bill alone.
Key points
- Determine which loads must continue and the quantity and duration of replacement power required.
- Price grid purchases, generator fuel, rentals, labor, transfer equipment, and setup or teardown costs.
- Estimate lost output using units not produced multiplied by contribution margin, then add restart, spoilage, overtime, and expedited delivery.
- Model partial derating, short interruptions, and full shutdown separately.
What it depends on
- Critical-load requirements and process operating limits
- Historical or expected fault duration and frequency
- Replacement-power availability and cost
- Production economics and restart characteristics
Risks and trade-offs
- Replacement power may protect production but introduce fuel, emissions, noise, maintenance, or safety costs.
- Gross revenue is not the same as lost profit.
- Rare extended outages can dominate expected annual cost even if average downtime is low.
Information you may need
- Load lists and process power measurements
- Production, margin, labor, and waste data
- Fault logs and outage history
- Quotes or records for temporary and backup power
Your next step
What to do next
Prepare a scenario-based downtime worksheet and validate the assumptions with operations, finance, and the electrical service provider.
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