Solar Project Pitfalls – and How to Avoid Them

Increasingly clients are coming to us with solar-related issues – ones that could have been avoided if Usource had been involved up front in the evaluation and negotiation process.

We strongly urge you to contact a Usource advisor if you are thinking about installing solar or are early in the process, to avoid problems in the future.

Below are some issues we have come across:

  • Solar PPA price exceeds the market: One company we are working with locked in a Power Purchase Agreement (PPA) price above market rates for one of its locations.
    • At the front end, we can utilize our knowledge of solar markets and our RFP process to ensure you get a fair solar agreement that meets your objectives.
  • Excess net metering credits: Another company has a solar contract to offset a sizable portion of their electric usage but did not understand how net metering credits would be applied, thus leaving them with a large credit on the utility bill and an unexpected balance due on the supply bill.
    • Usource can help assess net metering rules and the proper sizing of solar off-take to ensure you realize the maximum benefit of your net metering credits.
  • Material change clause in supply agreement results in monetary penalties: Another company didn’t realize there was a material change clause in the electric supply agreement that exposed them to significant monetary penalties for reducing their electric consumption.
    • Here, Usource would review your supplier agreements, identify contractual issues, and advise on impacts and assist in negotiations to avoid penalties.

Making a decision to install solar can be a solid economic decision, but it’s not a simple one and cannot be done in a silo.  It’s important to understand the key assumptions in the economics, how they might change over time and to understand the value drivers in a PPA.

At Usource, solar project procurement is part of our service offering.  We will perform a feasibility study including a business case with sensitivities to market and regulatory risks.  If solar makes sense for you, we will then conduct an RFP with qualified solar developers, and help you evaluate bids and negotiate a PPA or installation contract. Contact us with any questions or to get started on your project.


About the Author

Scott MacDonald is Usource's Managing Director. With more than 20 years of experience in the energy industry, Scott has extensive knowledge of energy market strategy, consulting, and energy economics.

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