July 27, 2023

Some of our advisors sat down to discuss and provide answers to the more challenging questions relating to one of today’s hot topics in the energy world, Solar. Our advisors function as owner’s representatives and are driven to help you be successful.

What does it mean to be an owner’s representative?

It means we talk to the board about the details, represent your organization’s best interests, and identify opportunities and threats within the marketplace. Essentially, we are unbiased advisors that are experts in our field.

Since we are not selling solar, just advising, you can trust us to manage the price and risk associated with solar projects. We streamline the whole process so that you can stay focused on your other priorities!

Tough Questions Surrounding Solar

Is every school/business/organization a good fit for solar?

Short answer, no. There is a lot of confusing gray area regarding all things solar. Solar is not a great fit for everyone, and it is a long-term commitment, so you want to ensure it is the right fit before moving forward.

We are a school/public entity that is interested in solar. Where do we start?

First, we would help you with a preliminary analysis to see if it would make sense for your property. Often the analysis ends up being more of a disqualifying step rather than just qualifying everyone. When doing this analysis, here are some things to keep in mind:

  • Older buildings might not be solar-ready for the actual solar system (think panels, wiring, rooftop, etc.)
  • Ownership options – would the school own and maintain the system, or would you work with a third-party power purchase agreement?
  • Energy Savings / Load Offset with Solar
  • Solar companies can often give biased advice since they are not a neutral party and are motivated to do the project no matter what.
  • Project cost
  • Qualified Incentive Amounts
  • Visuals, what will the project look like on the property?
  • Letter of Intent – Solar companies will ask for this too early in the process before knowing if it would make sense for the school

What are qualified incentives?

The solar industry has a lot of incentive programs, but they are not always great. These incentives can help organizations financially justify solar projects. Historically there have been ‘boom or bust’ incentives that were very time sensitive, so people would rush to get the incentive but not do their due diligence to see if it would even be a good fit.

More recently, these incentives are less time-sensitive and can help make projects more financially viable. There are federal and state incentives. Often, they give you a full ten years to complete solar projects. We can help advise on which incentives would be most beneficial to you.

Safety is a big concern for our school/public entity. Are solar panels safe?

Solar panels are huge electrical systems often placed on critical public buildings, including schools, military bases, water treatment centers, and data centers. Generally, solar panels are not much different from other types of electrical infrastructure, so they are susceptible to electric fires.

Getting the panels installed and maintained by qualified professionals is very important. There is nothing super unique that would make solar panels more unsafe than other electrical systems. For extremely risk-averse organizations, off-site solar could be a better option!

What would the timeline look like for a solar project?

Depending on the utility and usage for the property, it can take anywhere from about 12 to 18 months from installation to getting solar energy.

What causes delays during the solar project process?

  • Needing updated pricing (solar panels are at a 2-year low cost right now)
  • Updated Incentive estimates (state-level incentives change often)
  • Supply chain issues
  • Cost of supplies and labor
  • ROI might not make sense anymore, and the project might not be viable anymore
  • Project is not financially compelling anymore (this is why a feasibility study is helpful)
  • Not enough bandwidth from the owner of the building, other issues taking priority

How can these delays be prevented or handled more efficiently?

Bringing on an owner’s representative/advisor to keep the process moving and communicate with all involved parties. The advisor will also help to foresee some of these issues during the initial analysis of the project.

These projects take a long time. How can an owner’s representative help to keep the project moving forward?

In schools, for example, board members may change during the process, but the owner’s representative will remain the same throughout the entirety of the project! It is important to remember that future board members (think 5-10+ years) will still be responsible for these solar panels, so setting them up for success with an owner’s representative would be advantageous.

Solar contracts can be long and confusing. What are some things that should be considered when choosing a contract?

While solar contracts can be lengthy and jargon-heavy, we can help you break them down into more easily understandable terms. Here are some things we would keep in mind (using a school, for example):

  • What type of ownership will this project be?
    • Purchase model (where the school owns the solar system) or third-party ownership model
  • If the school owns the system, would the incentives go directly to the school? How will the incentives be obtained? Will the solar company secure the incentives on behalf of the school? What account would the incentive money go to? Should a board member secure the incentives?
  • Energy savings components
    • Will the energy savings be guaranteed by the solar or energy provider? Some of these components can be more complicated than others

Third-party ownership contracts contain more information and are longer; additional information on these includes:

  • At the end of the contracted term, will the solar company remove the panels? Who will fund the cost of removing the panels?
  • Decommissioning Bond for solar panels
  • Annual escalation of rates
    • We recommend these be 1.5% or lower; some contracts can have them as high as 2-3%
    • Will these higher rates be tacked onto the utility rate
  • Is inflation being considered?

This information may seem overwhelming initially, but solar is no small task, so let us help you determine if it would be a good fit for your organization. If it is a good fit, we will guide you through every step of the process!

Our lead solar advisor Aaron Raftery is available for a discussion anytime!