Installing solar panels on your property offers financial and environmental benefits, but it's important to de-risk your project by selecting the right provider and negotiating fair project terms. If you've had a negative experience with a solar project before, you might be concerned about potential issues and how to safeguard your organization against them in the future.

This guide will explore how the RFP process can help mitigate these risks and emphasize the importance of considering experience and quality metrics when selecting a provider. Furthermore, we'll address steps to take if your solar project does not perform as expected.

💰 What happens if my Provider goes out of business?

How the RFP process mitigates this risk

  • Experience metrics: Station A evaluates providers’ experience by asking for MWs installed & interconnected in the US, state, and utility in the last 3 years. Rather than evaluating MWs or dollars in pipeline, these metrics speak to providers’s business success in continuously developing projects over time.
  • Quality metrics: Most providers go out of business because of repeated poor-quality installations that pose reputational troubles. Station A asks providers for quality checklists and timelines to see the level of detail in their work.
  • References: Station A collects references from previous projects for you to reach out to - this is perhaps the best way to ensure you’re working with a high-quality team that will receive continued business.

What if this happens anyway?

  • Equipment warranties: All major components (modules, inverters, racking) have warranties that reflect a large portion of the capital expense of an item. These still need to be upheld by the manufacturer regardless of the installer.
  • Operations and maintenance contracts: Years after the installation, the system will continue to receive regular O&M, oftentimes via a 3rd-party provider. If the developer who goes out of business had been providing in-house O&M, the owner of the system would re-contract O&M with another provider.
  • PPA scenario: If the developer goes out of business, the PPA will remain intact as long as the financier is in business. When a developer goes out of business, the debt holder usually sells the project to another entity, who would re-contract O&M. If the financier goes out of business, you could either decommission the system or find a new financier for the PPA.

☀️ What happens if my system does not produce or underproduces?

How the RFP process mitigates this risk

  • Performance guarantee: Offered by the module manufacturer and sometimes called a linear performance warranty. If a panel degrades at a faster rate than designed measured as a percent of predicted output, they will replace that module at no cost. By the 25-year mark, this guarantee is typically between 80-90%.
  • Production guarantee: Offered by your developer, this is a guarantee that your system will produce a certain percentage of the estimated production every year. Your contract should include a compensation clause for any underproduction. Note that this oftentimes isn’t guaranteed for the lifetime of the project, and is sometimes aligned with the length of a workmanship warranty. A good production guarantee is 90%. A manufacturer’s performance guarantee is typically the same or lower than the developer’s production guarantee.
  • Performance bond: During the contracting phase, you may also consider requesting a performance bond, which is a financial guarantee that a system will perform as promised.
  • Operations & Maintenance contracts: Your O&M agreement will include regular monitoring and maintenance of the system. If your O&M provider fails to identify the underproduction of a system, this would be a violation of the contract. In the case of an issue, an operations and maintenance contractor will identify the source of the problem and replace any faulty equipment.

What if this happens anyway?

  • EMS software: Your system links to an Energy Monitoring System that your team can use to check daily production curves. It is also recommended to request that the developer or O&M provider deliver monthly system performance reports to catch any unintended dips in production.
  • PPA scenario: In a PPA, the financier only makes money on the investment if the system produces, so underproduction risk is inherently reduced by the deal structure. That being said, PPA-financed systems are still upheld by a production guarantee. If the system underproduces, the worst-case scenario is that you pay brown power costs instead of the more favorable PPA rate.

⚠️ What happens if my system malfunctions and creates a disaster like a fire?

How the RFP process mitigates this risk

  • Equipment: Station A’s RFP process solicits the manufacturers and models of the modules, inverters, and racking used in each proposal. We typically look for reputable inverter manufacturers and Tier 1 modules.
  • Design: Station A solicits Helioscopes which show if providers are taking proper account of roof obstructions and setbacks and strategically running the least amount of conduit to the interconnection point. Other aforementioned quality metrics also help ensure that your system is thoughtfully designed by an experienced team.
  • Safety: Station A requests safety documentation and a reported Experience Modification Rating (EMR) which serve as a proxy for quality.

What if this happens anyway?

  • Probability: It is worth noting that the probability of your solar system catching fire is extremely low — about a %0.006 chance. Most fires are caused by poor design, equipment, or installation practices. That being said, some teams prefer to further protect themselves in the case of a fire via insurance.
  • Insurance: Several types of insurance can cover fire risk. Before exploring new solar-specific insurance options, check with your existing commercial property insurance provider: Your building or roof insurance provider may already cover this at no additional cost. It is also wise to confirm the maximum value of damages covered in the event of a fire.