When analyzing the performance of a photovoltaic plant, attention is typically focused on gross energy production, the Performance Ratio (PR), and inverter availability.
Yet there is a category of losses that rarely appears on standard monitoring dashboards, despite accumulating quietly month after month: auxiliary power consumption and reactive power.
Across medium- to large-scale PV portfolios, these hidden losses can amount to tens of thousands of euros in lost revenue each year. Over the lifetime of an investment, even the most conservative financial models can no longer afford to overlook their impact.
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Auxiliary Power Consumption
Auxiliary power consumption refers to the electricity drawn from the grid to keep the plant’s internal systems operational. The main sources include:
- Standby inverter consumption (control circuits operating 24/7)
- Monitoring, data logging, and communication systems
- HVAC and ventilation systems for electrical substations and switchgear rooms
- Lighting, perimeter security, and intrusion detection systems
- Anti-condensation heaters for transformers and electrical switchgear
- Tracker motors (in single-axis or dual-axis tracking systems)
For a 10 MWp photovoltaic plant generating approximately 14 GWh per year, even a relatively modest level of auxiliary power consumption—around 1–1.5% of gross energy production corresponds to 140,000–210,000 kWh annually drawn from the grid. At an electricity purchase price of approximately €0.12–0.13/kWh, this represents an annual operating cost of €17,000–27,000 per plant, increasing almost linearly with the size of the managed portfolio.
The real issue, however, is not only the direct cost. Auxiliary consumption is rarely monitored systematically or accurately allocated within the management accounting of individual Special Purpose Vehicles (SPVs). An abnormal increase in nighttime consumption is often the earliest indicator of an emerging fault, long before daytime production data reveals any measurable deviation. A malfunctioning cooling fan, an inverter operating outside its expected standby consumption, or an unintended electrical load left energized can all remain unnoticed without granular consumption data, allowing unnecessary costs to accumulate quietly for weeks or even months.
The situation is further complicated by seasonality. Auxiliary power consumption is not constant throughout the year: HVAC systems in electrical substations consume significantly more energy during the summer months, while anti-condensation heaters increase their contribution during cold and humid periods. Establishing a monthly historical baseline, rather than relying on an annual average, is the only reliable way to distinguish normal seasonal variations from anomalies that require investigation.
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Reactive Power: a Technical Concept with Direct Financial Implications
Electrical energy consists of two distinct components:
- Active Energy (kWh): the useful energy that performs work, is generated by the plant, and is financially remunerated.
- Reactive Energy (kVArh): the component that oscillates within the electrical network without performing useful work. Although it does not directly produce energy, it is essential for supplying the inductive and capacitive loads present in the plant.
The relationship between these two components defines the power factor (cos φ). A power factor of 1 represents the theoretical ideal. In practice, however, transformers, cables, and the EMC filters within inverters inevitably introduce a reactive component that is measured at the grid connection point.
Penalties in Italy
Under the regulatory framework established by ARERA (Resolution ARG/elt 199/11), medium-voltage (MV) connected generators are required to maintain their power factor within the range of 0.90 lagging (inductive) to 1.00. When the power factor falls below this threshold, the distribution system operator may apply reactive energy charges directly to the electricity bill, with penalties increasing as the power factor deteriorates.
The tariff structure generally includes a no-charge tolerance band, an intermediate charging band with limited costs, and a higher-penalty band for power factor values below 0.70 or for unmanaged capacitive reactive energy. For plants connected to the high-voltage (HV) network, the applicable requirements are defined by Terna’s Grid Code and the CEI 0-16 standard, which impose even stricter requirements for dynamic reactive power control.
The paradox for photovoltaic plants is that they can simultaneously generate revenue-producing active energy while consuming billable reactive energy. This situation is particularly common during nighttime hours, when auxiliary systems remain in operation even though no solar generation is available to offset the reactive demand. As a result, the point of common coupling (PCC) records a net import of reactive energy, which the distribution system operator bills independently of the plant’s energy production performance.
The main sources of reactive power in a photovoltaic plant are MV/LV transformers, which continuously absorb inductive reactive power even under no-load conditions, connection cables, inverter LC filters, and the inverter firmware configuration itself.
This last aspect is often overlooked: many inverters are commissioned with factory default settings at unity power factor (cos φ = 1), without accounting for the reactive power already absorbed upstream by transformers at the metering point. A periodic review of inverter settings, based on reactive power profiles recorded by the meter, can eliminate penalty charges without requiring any hardware modifications. For poorly configured or unmonitored plants, monthly penalties per site can range from a few hundred to several thousand euros.
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Priority Actions
On the operational side
The starting point is the systematic acquisition of the quarterly (15-minute) meter profiles at the grid connection point (registers 1.8.0, 2.8.0, 3.8.0, 4.8.0). These datasets, available through the e-Distribuzione portal or via direct remote metering, contain all the information required to calculate both nighttime auxiliary consumption and the average monthly power factor.
Analyzing active energy consumption during nighttime hours (21:00–06:00), and comparing it against a historical baseline built over at least 12 months, makes it possible to detect anomalies well before they become visible in production reports. A deviation greater than 15% compared to the historical average for the same month of the previous year is a reasonable operational threshold to trigger a technical inspection. The average monthly cos φ for each plant should become a standard KPI in operational reporting, alongside Performance Ratio and inverter availability.
A further best-practice control is the systematic comparison between gross energy production recorded by the LV production meter and the energy injected into the grid recorded by the MV export meter. The resulting difference, normalized against gross production, represents the plant’s total internal losses, including transformer losses, cable losses, and auxiliary consumption. A persistent gap exceeding 3–4% should be treated as a priority issue requiring investigation.
On the asset governance side
At the contractual and asset management level, it is considered best practice to define a threshold for auxiliary consumption (e.g., ≤ 1.5% of annual gross energy production). This helps incentivize active monitoring by the asset manager and makes a typically opaque cost item measurable and enforceable within contractual frameworks. To be effective, such a threshold should be complemented by monthly reporting of the metric and a clear escalation procedure in case of exceedance.
Reactive energy penalties, on the other hand, should be treated as a structural recurring cost in asset valuation models, rather than as an extraordinary expense to be accounted for only when the utility invoice arrives. In long-term financial models, a conservative estimate of expected penalties—based on historical reactive power profiles—should be included among recurring operating expenses. This approach improves the accuracy of financial projections and, more importantly, creates the right incentive to proactively optimize plant configuration.
Conclusion
The efficient management of a utility-scale photovoltaic plant does not end with maximizing gross energy production. It also requires granular control over less visible items those that do not appear in irradiance charts but nonetheless erode operating margins with the same consistency.
In a market where returns are tightening and competitive pressure on contracts is increasing, the advantage belongs to those who monitor better, not because they operate newer assets, but because they know where to look.
Technical Notes and Regulatory References
- ARERA, Resolution ARG/elt 199/11 — Tariffs for connection to and use of electricity distribution networks.
- ARERA, Resolution 654/2015/R/eel — Regulation of transmission service quality.
- Terna — Grid Code, Annex A70 — Technical requirements for connection to the high-voltage grid.
- CEI 0-21 — Technical reference standard for the connection of active and passive users to low-voltage (LV) networks.
- CEI 0-16 — Technical reference standard for the connection of active and passive users to medium- and high-voltage (MV/HV) networks.

