Most public entities and some large corporations must initiate solar projects through a formal process. They send out a request for proposal (RFP) and evaluate competitive bids before selecting a vendor for the job. If your organization plans to create a solar RFP, know that the quality and specificity of the proposals you receive will most likely match the quality and specificity of the RFP you send out.
The more information you can provide on the site, building(s), schedule, requirements and so on—the more thorough and accurate vendors can be in their responses. It’s worth putting extra time and thought into developing your solar RFP so you can elicit proposals that address your organization’s values and priorities.
Here are some tips for creating a highly effective solar RFP:
- Hire a solar energy consultant
- List and prioritize your goals
- Simplify and align your requirements
- Standardize your requested information
Hire a Solar Energy Consultant
If you’re starting to think about solar in a serious way, it’s a good idea to hire a solar energy consultant early in the RFP process and have them help you draft a solar-specific version. An expert who has guided solar projects like yours in the past can help you avoid pitfalls and ensure that you get the right solution for your organization. Commercial solar companies are often happy when a buyer works with an independent energy consultant. Solar consultants are not affiliated with specific solutions, and they can educate their clients, helping the process move more smoothly.
If your organization has not used an energy consultant previously, ask for referrals from your industry peers who have already installed solar.
List and Prioritize Your Goals
The proposals you receive will match what you request—usually to the letter. So draft your renewable energy RFP in such a way that vendors will address your priorities the way you want them to. What’s most important to your organization? Why are you going solar? Is it long-term savings? Achieving corporate renewable energy goals? Reducing emissions? Generating more energy for daily operations?
To maximize the chance responses match what you’re after, list your top priorities and put them in order of importance—then model the RFP on that list. For example, if long-term savings is priority one, don’t focus your RFP on a different objective (e.g. system upfront costs). The two goals may not be compatible, and you could get unsatisfactory proposals if you give them disproportionate weight in your request.
Simplify and Align Your Requirements
Keep RFPs as simple as possible and only ask for what you want. If you begin with an RFP template for a general construction project, you’ll get a whole lot of information you don’t want or need. For example, a general construction RFP might ask for a certain grade of steel in structural supports. That may not apply to solar projects, and could be quite expensive for solar vendors to try to accommodate that request. Providers will do their best to address every requirement in an RFP, so unnecessary requests can add additional costs to the bids and/or time to the bidding process.
That said, there are some important aspects of a solar installation you’ll want all respondents to address:
- Procurement method—RFP responses should be specific to the solar procurement model(s) your organization is considering. Are you looking to own your system by purchasing outright or financing with a loan? Or is entering into a lease or power purchase agreement (PPA) an option? How you intend to pay for solar will affect many aspects of the proposals you receive.
- Financial health—Your solar company should be able to demonstrate the financial strength and consistency to minimize risk during construction and remain reliable for the duration of your relationship. That could be decades if you’re entering into a long-term lease, PPA or operations and maintenance (O&M) arrangement.
- Solar installation experience—This is one of the most important qualifications for a solar vendor. Look at how long the company has been in business, how experienced its team members are, what projects they’ve installed similar to yours, whether they have a solid financing track record, etc.
- System warranty and performance guarantees—There’s a wide range of solar equipment warranties, and they make a huge difference in your potential long-term return on investment. Look for performance guarantees and a combined power and product warranty that provides long-term protection in the event of flawed equipment or breakage. It’s best if the length of your performance guarantee (PeGu) and system warranty match the contract term (in the case of PPA or lease), and as long as possible if you’ll own the system.
- Operations and maintenance plan—Solar companies offer operations and maintenance (O&M) plans to optimize your system performance over time. Typically, you’ll need to have an O&M arrangement in place to keep your system warranty and/or performance guarantee active.
- Safety and compliance—This should be a given for any credible solar contractor, but you need to reduce the risk of accidents by requiring candidates to provide safety records, a detailed project safety plan and assurance that they will adhere to your required standards. Check for OSHA violations or other compliance issues by requiring that documentation of any incidents be included in all RFPs.
Standardize Your Requested Information
Ask respondents to provide the information you need in a specific format that will allow you to make meaningful comparisons among bids. For example, if you want to know which system would save you the most money over 25 years, ask for an estimated dollar amount of savings projected over that period of time with their proposed solution.
If you just provide an open-ended pricing page, you are likely to get a wide variety of responses that are difficult to compare. One vendor might give you a dollar-per-watt project cost while another might provide an estimate based on a levelized cost of energy or PPA. Those really aren’t the same at all, and neither one tells you much about long-term savings.
Similarly, if you don’t specify the time period you’re looking at, you won’t be able to make an accurately informed decision. Why not? Since all PV solar panels degrade over time, a lower-cost product might perform just fine for its first few years but drop off dramatically in its efficiency later on. A product that maintains a higher efficiency and useful life for 25 or more years would produce greater savings over a longer period of time. So if what you really want most is long-term savings, establish that as the metric on which you will evaluate the bids. Then you’ll be able to make meaningful comparisons among proposals and a more informed decision.
Finally, consider assigning weighted values to your prioritized selection criteria to help account for factors other than price or total savings. Many savvy buyers evaluate bids based on a weighted average of various considerations, including vendor qualifications and economic sensitivities. This ensures that important factors such as safety, durability, quality and risk get appropriate emphasis in the course of your deliberations.
The solar project proposals you receive will only be as good as the RFP you write. If you want accurate bids that closely match the outcomes you want, invest time and effort to tailor your RFP so it aligns with your organization’s goals and values. Cut out extraneous requirements so you don’t get back bids with superfluous information and bloated costs. Simply put, higher-quality RFPs will return higher-quality bids. Be precise and purposeful in defining your RFP and you’ll be far more likely to get the responses you’re looking for.