Solar Powering Your Community: Key Elements of Solar Requests for Proposals (Text Version)
This is a text version of the video Solar Powering Your Community: Key Elements of Solar Requests for Proposals.
It is part of the 2013 Solar Technical Assistance Team webinar series. This webinar provides an overview of the solar procurement process, including key steps to developing a Solar Request for Proposal, what elements should be included in the proposal, how to evaluate bids, and the Milwaukee Shines case study.
>>Courtney Kendall: Good afternoon. My name is Courtney Kendall from the U.S. Department of Energy SunShot initiative and I'd like to welcome you to today's webinar, "Solar Powering Your Community: Key Elements of Solar Requests for Proposal." We're excited to have you with us today. We'll give folks a few more minutes to call in and log on so while we wait, I'll go over some logistics and then we'll get going with today's webinar. I want to mention that this webinar will be recorded and everyone today is on "listen only" mode.
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We will have a question-and-answer session at the end of the presentation. You can participate by submitting your questions electronically during the webinar. Please do this by going to the question's pane in the box showing on your screen. There you can type in any question that you have during the course of the webinar. Our speaker will address as many questions as time allows after the presentation.
What Is SunShot?
We will start the presentation off with a brief explanation of what is SunShot. The DOE SunShot initiative is a collaborative national initiative to make solar energy technology cost competitive with other forms of energy by reducing the cost of solar energy systems by about 75% between 2010 and 2020. You can get a lot more information about the broader initiative at www.energy.gov/SunShot. The Solar Technical Assistance Team—or often known as STAT—is a team of solar technology and deployment experts from DOE in the national labs system whose goal is to share the best available information on policies, regulations, financing, and other issues with state and local government decision makers when they need it. Elected officials, regulators and their staff can request specific assistance through STAT@nrel.gov and requests are reviewed on a rolling basis.
Today's Speakers
Today's speakers will give an overview of the solar procurement process. Our first speaker is Jason Coughlin, a solar financing expert with the National Renewable Energy Laboratory—also known as NREL. Jason focuses on all aspects of solar finance from residential projects to large-scale solar farm. Jason joined the lab in 2006 after a career in the banking industry.
Our speaker is Philip Haddix from the Solar Foundation. Philip manages the Solar Foundation's activities under the SunShot Solar Outreach Partnership program and leads or otherwise supports many of TSS research projects. His efforts relevant to today's webinar include authorship of a short guide on steps to a successful solar request for proposal and leading the development of a forthcoming web workshop on solar RFP's.
And Andrea Luecke from the Solar Foundation will wrap up the presentation today. Andrea is responsible for developing and implementing national educational initiatives and higher-level research that promotes the widespread adoption of solar energy. Among other things, Andrea is lead author of the award-winning national solar job census report and plays a leadership role in the U.S. Department of Energy's SunShot Solar Outreach Partnership program.
Now, I would like to go ahead and introduce Jason Coughlin. He will start us off with the presentation today. Jason …
Overview
>>Jason Coughlin: Thank you, Courtney and good afternoon everyone. We have an informative lineup today on this top of solar procurement. As shown on the agenda, I'll introduce the concepts and the context within which procurement of solar occurs in a development process. I'll then turn it over to the Solar Foundation, who has done extensive work in this area, and has created a very useful guide on the topic. And given that case studies are often the best way to illustrate the challenges associated with procurement, we're fortunate to have Andrea Luecke, the current director of the Solar Foundation but previously with the city of Milwaukee, to walk us through her direct procurement experience.
I'll wrap up the presentation with some things to keep in mind after the solar system has been installed and then we'll close with some resources and other sample documentation.
Project Procurement and Implementation
So, the assumption we make is that prior to launching the procurement process and going out for bids, the local government agency has worked through the various steps of the process to identify potential projects, collected the data to make an informed choice on which projects, if any, to pursue and then selected one or more projects to implement. If so, that brings us to the stage where we'll pull together the information we need to issue a request for proposal for RFP. You may also hear the term "request for information" or RFI. Often times, prior to issuing an RFP, an agency will have previously issued an RFI as part of its information gathering process from the local solar developer community on their proposed projects.
Procurement Plan for Solar PV System
If an agency is pursuing a single, small-scale solar project, it is likely gonna fund the project directly. If this is the case, then they are issuing an RFP to select a solar developer who will design, procure, install, and commission a project on its behalf and the local agency will likely base this decision on who can provide the most competitive price along with certain other criteria. The agency will own the project from the start. It may decide to contract out the operations and maintenance—or O&M—or it may handle this in house. However, for larger scale projects or a bundle of smaller projects, while the local government agency may still decide to directly purchase the system and follow a similar path as a small-scale procurement process, is very common these days for local government agencies to enter into Power of Purchase agreements where rather than directly buying the PV system itself, it contracts with a solar developer to purchase electricity produced from the system instead.
Procurement Process
This is a very different procurement process. The agency will be requesting bids that are based on the PPA price for electricity, the rate at which this electricity price increases over the life of a contract along with things like productions guarantees, buy-out options and end-of-term options. Once a solar PPA provider is selected, it is the solar company that will contract and pay for the actual installation of the system. Regardless of what you are procuring, the high-level process is the same. The local government agency will develop an RFP, issue it, manage the back and forth responding to bidder questions and concerns, receive the bids, evaluate them based on predetermined criteria and select the winning bidder.
Certain agencies who have a lot of experience in this area of procurement may handle the process on their own. Others may decide to hire a consultant to assist with or manage the process. With that, I would now like to turn it over to Philip from the Solar Foundation for a deeper dive into the procurement process.
About the SunShot Solar Outreach Partnership
>>Philip Haddix: Thanks, Jason, for the introduction and great overview. As was mentioned, I'm a manager of outreach and policy with the Solar Foundation, national 1C3 nonprofit organization, headquartered in Washington, D.C. focused on solar research, outreach and education designed to advance the global use of solar energy. The Solar Foundation is participating in this webinar by virtue of its roles as part of the SunShot Solar Outreach Partnership, the U.S. Department of Energy program designed to increase the use and integration of solar energy in communities across the U.S. Through this program, our aims are to increase the install capacity of solar electricity in U.S. communities through helping local governments address certain soft-cost barriers such as streamlining and standardizing their permitting interconnection processes, improving planning and zoning codes and regulations for solar-electric technology, and increasing access to solar financing. Our team also helps local governments navigate the solar procurement process which is why Andrea and I are here today.
If, after today's presentation, you feel like you would like more hands-on assistance in solar procurement, you should know that we also offer technical support services much like NREL's STAT program, but specifically targeted at local governments. Such technical assistance includes answering questions received through our "Ask an Expert" web portal; facilitating peer exchanges through which communities can communicate with and learn from other more solar savvy local governments; providing in-depth consultation designed to help local governments address specific solar policy; program or process issues and delivering customized training to help local governments and their stakeholders better understand specific solar issues. If you're interested in learning more about our program and services it offers, please visit our website at www.solaroutreach.org or send us an email at solar-USA@iclei.org. Through this program, we have released a short guide entitled "Steps to a Successful RFP" upon which much of what I'm going to talk about is based. You can download this guide for free from the TSF website: www.thesolarfoundation.org.
Coming Soon From SolarOPs
We are also working on another RFP related effort that we expect to release this fall. In this RFP web workshop, we will not only discuss the key elements that will be covered in today's presentation, but we'll provide sample language for each of these elements drawn from exemplary solar RFPs we've collected and reviewed over the past several months. In addition, this prerecorded workshop will include podcast interviews in which local government officials will share their experience with solar procurement as well as a reference table cataloging key elements from dozens of actual solar RFPs. This resource will be available this November through the SolarOPs website—again, at www.solaroutreach.org.
General Best Practices
In today's presentation, I would like to introduce some general solar RFP best practices and review some of the key elements of a good solar RFP.
The first best practice is a very fundamental one—starting with a clear, well-defined goal. The reasons you have for installing solar on municipal or county property will dictate what you put into your RFP, the types of proposals your receive and how these proposals are evaluated. For example, if your local government or state agency is interested in going solar primarily to save money on its electricity bills, then your RFP—along with the criteria you developed to review the proposal in response to it—will likely emphasize maximizing system performance while minimizing cost. If you have additional or other reasons for going solar—which is having a system raise visibility or awareness to solar, creating local solar jobs or using it just to be training solar workers—then each of these goals would have to be weighed against each other depending on their importance. The reasons for going solar can also impact some ownership options that are available.
If your local government is under a mandate to reduce greenhouse gas emissions and is required to retire renewable energy credit, to demonstrate compliance with these policies, they would likely need to purchase the system outright. This contracts with their "Buy the ownership" model which is upgrading leases for power purchase agreements—or PPAs—under which local governments make regular lease payments or purchase the electricity produced by a system on a per-kilowatt hour basis without owning a system. In which case, these racks are to be retained by the system owner. Additionally, you'll want to make sure you involve a broad set of stakeholders early on in the RFP development process. Some of these stakeholders can come within the local government such as city engineers to preach green, potential sites for structural integrity, legal staff to advise an RFP development in contracting, financial experts to help develop criteria to evaluate the economic liability of any proposals received and so on and so forth.
Others will come from the community itself. For example, one recent countywide program to install solar, a large number of residences sought input on RFP development from Homeowner Association representatives, solar industry experts and local residents. The stakeholders to target during your own RFP efforts, however, will differ depending on the goals of your solar procurement efforts.
Outcome-Based Requests for Proposals
Another best practice to keep in mind is to develop outcome-based RFPs focused on system performance rather than specific technical or equipment requirement. In the past, some local governments who have tried to heavily manage particular aspects of system design have found that doing so, can severely limit its ability to provide a system with the performance cost desired.
By generally limiting these specifications of system capacity in terms of kilowatts or megawatts or megawatts for production in terms of kilowatt hours or megawatt hours, respondents will have much more leeway to design a system that will meet your local government's needs. However, this shouldn't be taken to be mean that the RFP issuer shouldn't require vendors to use equipment that have been certified. It's having that certain safety or performance standards or meet certain warranty requirements. As will be discussed shortly, they absolutely should include these requirements. In designing an outcome-based solar RFP it is important that performance information be reported in a format that facilitates easy proposal review and comparison.
Pre-tools—such as NREL's PV Watts calculator—can provide basic performance estimates using only a handful of inputs and their System Advisor Model—or SAM—provides more sophisticated estimates using more detailed input.
Provide Site Information
In order for respondents to design a system that best meets your government's needs, it is important that they have as much information about the site or sites proposed for the installations possible. As such, the RFP should include—or the issuer should otherwise make available—the result of any site assessments, site photos, maps or plans, facility load data if the electricity produced by the system will be used on site, additions to infrastructure—such as grated roads or an electric grid system for larger installations—and schedules for any planned site visits. If after reviewing solar RFP resources such as this webinar, you find you're still unclear as to how your RFP should be designed, you might consider finding some outside assistance. Cities more familiar with solar—such as those who participated in the Solar American Cities or Rooftop Solar Challenge programs—may be able to share their experience and advise on RFP development.
Avoid Five Common Pitfalls
Additionally, as stated earlier, you might consider requesting complimentary technical assistance through NREL's program or from the SolarOPs team. This slide summarizes some main points from an older DOE webinar on solar RFPs and recaps some of what I've already discussed, especially the first two points. What I'd like to focus on here is the third point—finding a sufficient number of qualified bidders. Even if you develop the best RFP in the history of local government procurement, you're going to have a hard time getting bids of the desired quality and quantity if you don't get it out there. Consider disseminating the RFP as widely as you can through traditional media—which is local newspapers—on the internet through local government websites, by reaching out to local solar installers, advertising the RFP with industry associations.
The other major pitfall—lack of ineffective O&M and monitoring programs—will be covered when we're discussing key elements. Moving on to the key elements—this should be included in your solar RFPs.
Key Elements
The first relates to roof integrity and warranty. As far as roof integrity goes, you need to ensure that the roof is structurally sound enough to support a solar energy system and that it will continue to be able to during the project. For example, the Solar Decision Tree—a resource developed jointly by NREL and the U.S. Environmental Protection Agency, recommends that a roof should have at least 15 years remaining before it requires replacement.
In addition, these rooftops should be generally south facing, should avoid excessive shading from vegetation or nearby buildings, should be able to withstand the additional static loads from the weight of the system itself and dynamic loads such as wind and snow loads and have sufficient space for a solar energy system of the size desired. If you determine the roof isn't structurally sound enough to support a system or it will require replacement in the near future, you might consider including any replacement or reinforcement work in the solar RFP as some local governments have done in the past. In addition, you're going to want to ensure that any rooftop system installed won't violate any existing warranties covering the roof. This could be accomplished by including a clause in your RFP stating that the successful respondent is required to provide written certification from the parties responsible for roof warranty that the solar energy system, as installed, will have no adverse effect on roof warranty or else the company should be required to provide substitute warranty of equal value. Another key element for solar RFPs is ensuring that bidders have the financial capability to perform the work in question.
To this end, some RFPs include bid bond or bid deposit requirements. So, keep in mind that including such requirements can dissuade some installers from responding to the RFP as these requirements can be overly burdensome in their view. Other ways to evaluate to respondent's financial capabilities are to request audited annual reports from the past few years or recent income statements, balance sheets, cash flow statements or the company's investment rating.
Permitting and Interconnection Responsibility
Moving on, you should also ensure that any solar RFP issued by your local government makes obtaining the required permits, interconnection agreements and any other regulatory approval the responsibility of the contractor. However, local governments should keep in mind that permitting and other regulatory requirements can vary—sometimes greatly—between jurisdictions and that not all respondents may be familiar with your particular local process.
Given this, it would be helpful for the issuer to provide copies of applicable county or city ordinances or unique regulatory requirements, detailed information on local permitting practices and any permit application form. In order to ensure your RFP is successful, make sure respondents have the experience and qualifications to complete the project. In terms of experience, you might request the respondents provide a detailed list of the projects they have successfully completed in the past that are similar to the ones sought in the RFP. Additionally, respondents can be asked to provide client references the issuer can follow up on. In terms of qualifications, respondents should indicate that what training or industry credentials they have—such as NAV certification, that they have any licenses required to perform the work and whether the company or team has been involved in any disputes regarding previous projects.
Technical Specifications
As I mentioned earlier, though RFP issuer shouldn't request specific equipment models or system configurations, they can—and should—require that equipment used in the system meet applicable product codes or standards. For example, you might include in your RFP that modules meet the UL1703 standard for flat faced solar modules and panels and that inverters meet the UL1741 or IEE1547 standards for inverter safety. You can find lists of other standards you may want to include in the RFPs linked at the bottom of this slide. [Websites: www.thesolarfoundation.org/sites/thesolarfoundation.org/files/SonomaRFP_0.pdf, www.thesolarfoundation.org/sites/thesolarfoundation.org/files/SantaBarbaraRFP.pdf]. Additionally, any system should meet both the national electric code and international building code as they apply. And though different module manufacturers offer different warranties on their products, it's pretty standard these days to expect that any warranty provides that modules will produce at least 90% of their rated power output after 10 years and 80% after 25 years.
Operations and Maintenance
To keep you solar energy system functioning as designed, it is vital that you have an effective operation to put this program in place. If a local government is planning on assuming these responsibilities itself, it should include in its RFP a requirement for the successful respondent either hold a hands-on training session for your maintenance staff or provide your team with O&M manuals or both. Alternatively, the local government can pass this responsibility off to the respondent who can include the cost and roll it in in the project total. If you're looking for a third-party owned system through a lease or a PPA, owner and responsibility will most likely remain the responsibility of the developer. To help ensure the system is functioning as designed between scheduled O&M activity, your RFP should include a provision that the respondent provide some sort of performance monitoring program.
Such a program should include some sort of monitoring software with user friendly interface that measure system output at the inverter. This performance can then be checked against any performance estimates or guarantees provided by the respondent. Any significant difference between estimates and actual production or deviation from normal system output can be a sign that maintenance or other upkeep is required.
To ensure system installation is occurring at a reasonable pace, you may want to require respondents to require a timeline of major project development for a construction event against which you can check their progress once work begins. Such milestones can include dates by which all its permits or other regulatory approvals will be obtained, when an interconnection agreement will be executed with the utility, when equipment will be purchased, and the project financing arranged and when construction and systems operation will commence.
To facilitate comparisons between proposals, you might consider including a template in your RFP listing the desired milestones and giving the respondent space to indicate how many days they expect each to be obtained after the contract is signed. And finally, some local governments with goals to ensure public funds spent on the project support the local economy, may wish to include requirements for locally purchased equipment and labor. Issuers can include other labor requirements such as use of union labor, in which they should provide a copy of the budget labor agreements we've used or prevailing requirements. So, once all this information has been collected, how should your RFP staff or committee evaluate these proposals?
Proposal Evaluation
As you recall, a bit earlier I discussed how project outcomes are tied to project goals.
The same is true for the criteria used to evaluate proposals. Because goals differ between projects, it's difficult to provide a one size fits all templates for you to base your evaluation criteria upon.
Instead, I have reproduced on the next few slides some sample proposal evaluation metrics to give you all an idea of what factors can be considered. The first example—this slide here—is relatively straightforward. Most of the criteria relates to cost effectiveness, project approach and schedule, team qualifications and experience.
From this, it's clear that the goal of this project is to get a quality system that minimizes cost while maximizing performance. Note also the values assigned to each criteria on the right hand side. So, not all RFP issuers include weights for each criteria and doing so, will give respondents a clear idea of the parts of the RFP that are most vital to focus on and how to best manage their time and effort in developing response to the RFP.
Evaluation Criteria
The next example begins to show how evaluation criteria reflects the nature of the project and its goals. This was taken from an RFP for a solarized program.
A local government led efforts to aggregate demand for solar from a large number of homeowners in the community in exchange for a bulk discount from the installer selected to do the RFP work. As you can see, some of the criteria are the same as before, including the permission on the installer in qualifications, cost, and schedule. Because solarized programs have a large community outreach component, the issuers of this RFP wanted to ensure the successful respondent was experienced in skilled and marketing which is reflected here by the inclusion of marketing strategy in the criteria. Additionally, it was important to the RFP issuer that local labor and service providers be used throughout the program which resulted in use of local providers being added to the list of evaluation criteria. Here's another example.
Note again how criteria such as leveraging project educational value and ability to contribute to local economic development were included—both of which were additional goals of going solar. I'd like to end my portion of the presentation with a brief note on third-party ownership. While most of the key elements discussed previously applied to both direct ownership and third-party ownership—with the inclusion of O&M which, as I noted previously, is typically the responsibility of the developer under third-party ownership.
Unique Considerations for TPO
There are some additional points to consider here. First, rather than a flat, overall project cost, systems installed under a Power Purchase Agreement have their prices quoted in dollars per kilowatt hour in the same way as electricity purchased from a utility. This PPA price can either be fixed—again, in dollars per kilowatt hour—or floating, meaning that the rate can fluctuate over time but it is guaranteed to be a fixed percentage below utility rate.
In soliciting bids for PPA rates, your RFP should specify which price should be reported. In addition, PPA rates often increase over time to keep up with inflation according to what is called a price escalator—a percentage annual increase in the base PPA rate. It is important to collect this information during the proposal process as well. Another point to consider is contract term length. PPAs can run from 15 to 20 years on average or sometimes longer.
The desired contract length should be included in the RFP. Because the developer will own the solar energy system installed on local government property, he should be expected to carry the proper types of insurance protecting them against liability. At minimum, a system owner should have a general liability and property insurance. Finally, your RFP should ensure that any regulatory risks is shifted off the developer. For example, some states have policies that provide for the generation and sale of solar renewable energy credits or SRECs.
As noted previously, the system owner—or the developer in this case—typically retains ownership of each credit, the value of which is reflected in a lower PPA rate for the customer. Should the value of these SRECs unexpectedly decrease, solar customer would want to make sure that this doesn't cause their PPA rate to go up. And that's the end of my portion of the presentation. I'll now turn it over to Andrea who will discuss her experience in solar procurement with the Milwaukee Shines program.
Case Study: Milwaukee Shines
>>Andrea Luecke: Thanks, Philip. Hi everybody. Thanks for having me on today's webinar. As mentioned, I was the project manager for the city of Milwaukee Solar American Cities solar program, Milwaukee Shines from 2008 to 2010. For the past 3 years, however, I've been the executive director of the solar foundation headquartered in Washington, D.C.
We develop national research and education programs to promote the widespread adoption of solar energy. In addition to the jobs research that we conduct, we help implement the Department of Energy's Solar Outreach Partnership program which is an effort to increase the use and integration of solar energy in local governments across the country. Part of the effort of the city of Milwaukee's solar program involved leading by example and procuring solar for several municipally owned facilities—as many as we possibly could do.
First Attempt
Although Milwaukee demonstrated enough of a commitment to solar and clean energy to be designated by the DOE as a Solar American City in 2008, we encountered quite a few complications in our first solar procurement process that led to three—yes, three— attempts at the RFP process over the course of 3 years to get solar hot water systems installed on firehouses across the city.
Now, one of the reasons for these complications was the limited experience city staff had with contracting for solar. During the initial RFP development process, the city discovered that each department had its own procurement process and that no standardized template was available with the level of detail that we needed for solar. Before I joined the program, the former director of the city's Office of Environmental Sustainability—her name was Anne Byer—she's a wonderful woman who also was my mentor—Anne worked with city's Department of Public Works and the city's procurement office to release the first of three RFPs for nine solar hot water installations on municipally owned firehouses. The goal, of course, in this process was to satisfy the fire station's year-round and consistent demand for hot water by using solar energy. And the driver here was that these systems would save the city money over the long run by off-setting natural gas fuel costs.
Great goal. However, the proposal that Anne received in response to this first RFP attempts were all for projects that would cost the city at least double what was budgeted—meaning the city wasn't able to contract with an installer and that the project had to be put on hold.
The primary lesson learned here was that these installation projects were over designed making it very difficult for the local thermal installer base to respond in a cost-effective way. The city's 40-plus page RFP contained very specific and very prescriptive technical and equipment requirements that contain minute details about the exact hardware that needed to be used as opposed to indicating the desired hot water production. So, while Anne and the other city staff rightly thought that a very specific RFP would ensure quality and help reduce liability to the city, it made it very difficult and actually, in this case, impossible for installers to leverage the suppliers that they're comfortable using or familiar with and also made it impossible for them to respond with innovative designs.
And as these firehouses were not built with solar in mind, innovative designs were definitely needed.
Second Attempt
I came on board after the first RFP attempt and in early 2009, with the help of our NREL technical assistance—Jason Coughlin—we redesigned the RFP document to be more flexible and outcome-based by specifying production requirements instead of the equipment that we thought should be used. The RFP was—it also specified which firehouses we wanted solar on. These selections were based on common things that generally effect solar site selection—like the roof age and the roof replacement cycle and of course, the hot water load. That said, we left much of the design and equipment detail up to the bidders. Though this effort was ultimately successful in finding a respondent offering the cost and experience that we thought, we hit another snag.
Just a few days before we were able to sign a contract with one of the bidders, we discovered that all of the firehouses covered by this second RFP required structural reinforcement that would cost upwards of $10,000 each. So, these additional costs obviously would have essentially doubled the cost of our project and ironically put us in the same financial situation that we were in after the first unsuccessful RFP round. Complicating matters further, we learned that the fire department was unwilling to cover system operations and maintenance. This was a responsibility that we had assumed that they would take on when designing the RFP.
During the process of finding a solution to these seemingly endless problems, a city engineer suggested that perhaps the reason the reinforcements were so expensive— $10,000 each—was due to the materials that were used for the roof tresses. He suggested that roofs with metal tresses would be more costly to upgrade than those would wood tresses and so he suggested we narrow our procurement efforts to cover only those firehouses with wood tresses. As for the O&M issue, it was decided after a lot of negotiating with the fire department that fire department maintenance staff would assume these costs and responsibilities but only as long as their staff received the proper training. So, okay, we could live with all of that and after this, things did start to come together. We figured out which firehouses had wood tresses and had site assessments done on each one of those facilities.
Then, in November of 2009, we were notified that we received a grant from DOE that we could use in the installer training on this project along with notification that we received a very generous donation of $2,000 worth of solar hot water system equipment from Caleffi—a local solar hot water manufacturer. So, after that, obviously—after that news, things did change for us but in a good way. In redesigning the RFP for the third time—third and final time, I should add—we indicated that we needed an installer familiar with the Caleffi equipment—that donated equipment. We also decided to partner with the Midwest Renewable Energy Association to develop a program that would allow these installations to be used to train apprentice installers—part of which meant that the successful bidder had to teach a hands-on installation class. Now, that's very specific, very prescriptive but for the greater good and it certainly takes advantage of local resources and helps to bridge what was once a very big gap with training and having trained installers.
Third Attempt
So, although we received only a few bids on this third and final proposal and only one from an installer who met all of our criteria, we were ultimately successful in our efforts. It took absolutely forever but finally, this city does have six firehouses using solar hot water. And thanks to the good work and diligence of Milwaukee's current solar manager, Amy Heart, the city is cruising along with solar hot water and solar PV on four additional facilities. So, my advice to those of you who are listening from cities that are interested in installing solar—while it can be an extraordinarily time consuming learning process, if you are thoughtful and patient with how you design the RFP and thoughtful and patient with how and where you site the systems—and consider tapping into those local resources—you may be able to chart a sustainable solar procurement process for future projects as well as help bridge some of your local solar market gaps.
Post-Procurement
>>Jason Coughlin: Thank you, Andrea and Philip. The Milwaukee case study was very informative and clearly demonstrates some of the pitfalls that Philip presented in his overview of the RFP process. To reiterate what Philip said, once we award the contract, while it does feel like we've reached our goal, in reality, we are just beginning. The post-procurement phase and getting a commissioned PV system also requires significant oversight to insure that timelines and budgets are met. And upon commissioning, while we like to think of a PV system as a set it and forget it, low maintenance operation, there are a number of key aspects we need to stay on top of.
As Philip noted, we need to make sure we are carrying out the proper system maintenance or that whomever we contracted to do it is doing what they agreed to do. We want to periodically check in on how the system is performing using whatever online monitoring system that was included in the project. And if the system is not performing up to expectations, we need to see if we are owed any compensation based on the performance guarantee provided. And finally, if we are a party to a PPA transaction that includes periodic opportunities to buy the system from the solar developer, are we evaluating the pros and cons of buying the system as these option dates approach and will we have financing in place to execute the purchase, should we decide to go that route?
So, to summarize, given that the RFP process can be somewhat laborious, we should certainly congratulate ourselves upon awarding the contract. However, it is important to recognize that we have embarked on a 20- to 30-year project either as the owner of a PV system or as a counter party to a PPA transaction, that it is important that we have someone—or a team of people—that remain engaged in the process for the life of the system.
Resources
As far as additional resources, a good comprehensive guide to solar projects in general is the "Solar Powering your Community" guide. It can be located on the web link found on the slides. [Website: www.energy.gov]
As it relates to RFP-specific resources, first and foremost, please tune in to the RFP webinar tutorial that the solar foundation is offering later this month. It looks to be a much deeper dive into the process with a number of good case studies included. In addition, you can consult the resources listed on the slide for additional information.
[Websites: Power Purchase Agreement Checklist for State and Local Governments (NREL): www.nrel.gov/docs/fy10osti/46668.pdf
Procuring and Implementing Solar Projects on Public Buildings (DOE): www1.eere.energy.gov/wip/solutioncenter/pdfs/procuring_and_implement ing_solar_projects_on_public_bldgs-how_to_avoid_common_pitfalls_12-810.pdf
Solar Decision Tree (EPA): www.epa.gov/oswercpa/docs/solar_decision_tree.pdf State and Local Government Procurement: A Practical Guide (NASPO): www.naspo.org/content.cfm/id/state_local_procurement_guide 30]
And finally, you can contact the Solar Foundation or NREL for support with your RFP process. So with that, we thank you for your time!
[Contact: Jason Coughlin (NREL): jason.coughlin@nrel.gov; Philip Haddix (TSF): phaddix@solarfound.org]
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