The stakes are high and so can be the savings with a locally sourced direct to utility solar asset. Your utility and ratepayers, community, property owners and large industrial energy users all stand to win when locally sited solar is added to your grid.
Local Power Companies (LPC) throughout the country, including those able to utilize the TVA Flexibility program, are now eyeing solar as a local power generation source. Rate payers can benefit from solar’s potential to lower costs. A solar and energy storage project can create local resiliency and independence. Projects bring benefits to the local economy and help fulfill sustainability goals to protect the environment.
If you are investigating solar, potentially in combination with energy storage, our team’s experience with over 150 projects can help you avoid common pitfalls in a clean energy development process.
8 Local Solar Project Pitfalls to Avoid:
I Solar Developers Without the Depth to Deliver
Pitfall: Project engineering, permitting, financing, construction, operations and maintenance and asset management are all critical aspects of a successful solar installation. High quality solar modules and other critical components are hard to source effectively without developers making major commitments. If you align with a developer who lacks in any of these areas your project could be delayed or derailed.
Solutions: If you are investing time talking to a developer, be sure they have the credentials to get the project engineered, financed, sourced, built and operated. Understand their ability to finance a project, and once permitted, whether their bonding and insurance capabilities support the scale of the project.
Origis Energy has deployed over $2 billion in solar and energy storage financing. Our experts work to ensure the financial interests of all stakeholders are upheld. An example of the company’s procurement strengths can be found in this agreement, one of the largest industry solar panel purchasing agreements. Our EPC strengths, including bonding and insurance programs, have been proven in large scale solar projects.
II Solar Developers Who Aim to Flip the Project
Pitfall: Developers with a business model to contract for a PPA then flip a project can deliver value in the industry ecosystem. However, there are real challenges to this approach. The developer may not be committed to the local community on a long-term basis. They may sell the project to an unknown entity and you are left with sorting out who will construct and operate your site.
Solutions: Investigate the background of the solar company prior to investing resources into the conversation and certainly before executing any PPA. Check out their project ownership / operation track record overall and in your region.
The Origis solar track record originates in 2008, including long term ownership and operation of projects in the U.S. In the southeast we are one of the early large scale solar developers, with nearly 500 MWs of solar developed and under operation.
III Project Fails to Deliver Promised Rate Savings
Pitfall: Engineering savings for ratepayers in the short and long term takes a concerted effort by the utility team and the developer, and in some cases, requires support from a rate consultant. The lowest bid for example, may be offered by a developer short on experience or resources to deliver on the promised Power Purchase Agreement (PPA) price, or the amount of savings represented.
Solutions: Ensure the proposed solar installation is properly sized to the percent of flexibility rate available, considering local distribution circuit constraints, AC/DC ratios and generation profiles.
Participate in transparent discussions utilizing your rate consultant and team members and the experts at the solar company to confirm all agree with the anticipated savings calculations.
Review opportunities for solar or more likely energy storage, to defer or negate the need for any future grid infrastructure in the build plans to reap additional savings and resiliency benefits.
Realizing rate savings from a solar installation requires in-depth rate analysis, transparency and communication between the utility, host landowner, partner corporate off-takers (if relevant) and developer teams, all working together to address the highest priorities of the project. Origis Energy has a demonstrated track record of bringing all these parties and perspectives together in over 150 projects to date.
IV Land Procurement Sidelines the Project
Pitfall: Land procurement can be difficult. Competitive processes in land-constrained service territories can drive up the costs for land most appropriately sited for a project and change the PPA pricing dynamics significantly. A multiple bid situation can also result in less experienced developers controlling the best land for a project. If many proposed projects throughout the service territory are rejected by an LPC, oftentimes landowners are disappointed (many having spent legal fees to review leases and purchase options), which may negatively affect the community’s perception of solar as a valued community asset.
Solutions: Determine if your LPC or local municipality owns land that may be suitable for solar installations. If the developer is willing to lease the land, then any lease income would accrue to the benefit of the entire community and costs can be controlled.
An internal review and land use strategy specific to solar and energy storage projects will help pave the way for a faster development process. This plan could include a heat map to give developers guidance on where to best locate projects on your system.
Origis Energy has developed a hands-on, locally sensitive approach to identifying best siting for local generation and securing land for all types and sizes of utility projects.
V Large Industrial Energy Users Left Out of the Loop
Pitfall: Cost savings and sustainability measures work hand in hand for a growing number of companies. A local industrial rate payer may be part of an eco-system of a large multinational firm who is working to ensure they or their supply chain meets RE100 or Environmental Social Governance (ESG), carbon reduction goals or other sustainability metrics. They may be the local refrigeration company who wants to save money. No matter the type of commercial operation, overlooking the clean energy needs of industry will cause you to miss an important component in capturing the full value of a locally sited solar project in your community.
Solutions: A review and discussion with local businesses in the community with large energy demand could help you assess