Commercial & Industrial Solar & Battery Energy Storage Systems Part 2: Project Lifecycle and Partner Evaluation

Commercial & Industrial Solar & Battery Energy Storage Systems Part 2: Project Lifecycle and Partner Evaluation

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Commercial & Industrial Solar & Battery Energy Storage Systems Part 2: Project Lifecycle and Partner Evaluation

Key Takeaways

  • The lifecycle of C&I solar and storage projects typically involves 3 key phases – planning and execution, operation and maintenance, and an exit strategy or decommissioning.  
  • On average, the planning and execution phase for projects can range from 12 to 24 months or more, depending on project-specific factors and external influences.
  • Optimal operation and maintenance of the system is what drives long-term value. The system owner or operator is typically responsible for all O&M activities.
  • Like any other capital asset, various exit strategies are available for organizations who no longer wish to maintain ownership or continue operation of the system.
  • Organizations should carefully evaluate and select an experienced partner for their cleantech projects to ensure the project's success, performance, and long-term value.

As businesses aim to cut down on energy expenses, boost sustainability efforts, and ensure more reliable operations, there's a growing push toward embracing renewable energy. With all the exciting developments happening in clean energy and how markets are changing, adopting solar photovoltaic (PV) and energy storage solutions could be a strategic move to drive long term-value for commercial and industrial (C&I) companies.  

Whether you're a business leader, operations manager, or sustainability professional, this two-part guide will provide you with an understanding of solar and storage solutions tailored for C&I applications. In Part 1, we covered the fundamentals of these clean energy technologies — their use cases and benefits — and delved into financing options and tax incentives that ensure positive returns on projects.  

In Part 2, we will give you a comprehensive overview of the full project lifecycle, so you know what to expect at each step, from development to implementation to operation and final exit strategy. Embarking on a cleantech project requires significant investment and resources, and selecting the right partner is critical to long-term success. We will provide you with a framework for evaluating and selecting a partner that will have the technical knowledge and execution experience to help you navigate the complexities of the project lifecycle.

Project Lifecycle and Timelines

The lifecycle of C&I solar and storage projects typically involves several key stages, from initial planning and feasibility assessment to system installation, operation, and decommissioning. Here's an overview of the typical stages and estimated timelines:

Phase 1: Planning and Execution

Consultation and Partner Selection (1-2 months)

Most projects begin with a consultation with cleantech developers to discuss your energy goals and requirements such as financial objectives, sustainability targets and operational constraints. They will evaluate the suitability of the site for solar and storage installation and present you with an indicative proposal. Factors such as solar resource availability, site orientation, shading, roof condition, structural integrity, zoning regulations, and utility interconnection options are assessed to determine the viability of the project.  

Site Assessment and Design (2-4 months)

Once the site's feasibility is confirmed, a detailed site assessment is conducted to gather site-specific data, such as roof dimensions, obstructions, electrical infrastructure, utility bills and load profiles. Based on this information, engineers design the system, selecting appropriate components, layout, and configuration to optimize energy generation and maximize financial returns.

Permitting and Approvals (1-3 months)

The project team obtains necessary permits and approvals from local authorities, building departments, utility companies, and regulatory agencies to comply with building codes, zoning regulations, environmental requirements, and interconnection standards. This process may involve submitting permit applications, engineering drawings, environmental assessments, and other documentation for review and approval.

Procurement and Financing (1-3 months)

With permits secured, the project moves into the procurement and financing phase. The project team procures all system components such as solar panels, battery modules, inverters, mounting structures, balance-of-system components, and other equipment from suppliers or manufacturers. Financing options, such as loans, leases, power purchase agreements (PPAs), or incentives, are arranged to fund project construction and operation.  

An experienced project developer will help you research incentives, utility programs or grant funding available in your locale and advise you on how to qualify for or enroll in them. These will often be included in project financial and cash flow modelling to provide an accurate forecast of project economics. Details on financing and incentives are covered in Part 1 of this guide.

Installation and Construction (2-6 months)

Once equipment is procured and financing is in place, construction begins. System components are installed according to the design specifications. The installation process may involve roof or ground-mounted systems, depending on the site conditions and project requirements.  

Testing and Commissioning (1-2 months)

After installation, the system undergoes testing and commissioning to ensure proper functionality, performance, and safety. System components are inspected, electrical connections are tested, and operational parameters are verified to confirm compliance with design standards and specifications.

Grid Interconnection and Utility Integration (1-2 months)

The final step is to coordinate with utility providers to finalize grid interconnection agreements, metering installations, and regulatory compliance requirements. Grid synchronization, meter testing, and utility inspections are performed to ensure seamless integration of the system with the electrical grid.

On average, the estimated planning and execution timeline for solar and storage projects can range from 12 to 24 months or more, depending on project-specific factors and external influences. Most common contributors to project delays are:

  • Permitting and Regulatory Issues: Delays in obtaining necessary permits and approvals from local authorities, building departments, zoning boards, and regulatory agencies can significantly impact project timelines. Complex permitting processes, zoning restrictions, environmental assessments, and interconnection requirements may lead to unexpected delays.
  • Utility Interconnection Challenges: Grid interconnection and utility integration can pose challenges, particularly if there are delays in securing interconnection agreements, metering installations, or compliance with utility standards and regulations. Utility coordination, metering delays, and grid access issues may prolong the interconnection process, delaying project commissioning and operation.
  • Site Constraints and Conditions: Site-specific constraints, such as limited roof or ground space, structural limitations, shading obstructions, or environmental considerations, can impact the design, layout, and installation of the system. Site surveys, structural assessments, and mitigation measures such as tree or vegetation removal may be required to address site challenges, prolonging project timelines.
  • Supply Chain Delays: Delays in procuring system components and other equipment from suppliers or manufacturers can impact project timelines. Supply chain disruptions, material shortages, production delays, and shipping logistics issues may affect the availability and delivery of critical components, leading to construction delays.
  • Financing and Budgetary Constraints: Financing challenges, budget constraints, and funding issues may impact project cash flow, procurement decisions, and resource allocation. Delays in securing project financing, negotiating contracts, or managing project costs can disrupt project timelines and stall construction progress.

Experienced project developers can minimize delays by conducting thorough planning to identify potential challenges early on, streamlining the permitting process through active engagement with utilities and regulatory agencies, and quickly developing contingency plans to address unexpected setbacks. By proactively managing project risks and maintaining effective communication with stakeholders to address concerns promptly, they can set and meet realistic project timelines and ensure successful project execution.

Phase 2: Operation and Maintenance

With the system now live and operational, the project moves on to the next phase –

operation and maintenance (O&M), where the project’s long-term value begins to accrue. Now the solar PV system is producing energy for direct use onsite, exported to the grid, or stored for use later in the energy storage system. Ongoing O&M activities are performed to ensure optimal performance and reliability. This may include regular inspections, cleaning, monitoring, troubleshooting, and repairs to address equipment failures, performance degradation, or system issues that may arise over time. The system owner or operator is typically responsible for O&M, or it could be outsourced to a third-party service provider.  

System Monitoring (Real-Time)

The system is continuously monitored by an Energy Management System (EMS) to track energy production, state of charge, and voltage levels, to identify trends, and assess system performance against expected outputs. Data from monitoring systems, such as energy meters, weather sensors, and remote monitoring platforms, are analyzed to optimize system operation, diagnose issues, and optimize energy generation and consumption.

Performance Optimization (Real-Time)

More advanced EMS’s go beyond monitoring and can leverage real-time data and advanced algorithms to dynamically optimize asset operation to maximize economic and sustainability outcomes. The EMS forecasts solar generation patterns, monitors weather conditions, and schedules operations to align with peak production times. It also coordinates the charging and discharging of battery storage systems, strategically storing excess solar energy for later use during periods of high demand or low solar production. Additionally, the EMS interfaces with the grid, facilitating grid interaction and ensuring compliance with utility regulations while maximizing self-consumption and minimizing reliance on grid energy.

Performance Analysis and Reporting (Weekly – Monthly)

Historical performance data, energy production trends, and system efficiency metrics are analyzed to identify opportunities for optimization, energy savings, or performance improvements. Reports, dashboards, and performance metrics should be available for stakeholders, clients, regulatory agencies, or financiers to track system performance, financial returns, and environmental benefits.

Incentive and Utility Programs Management (Monthly - Quarterly)

Maintain compliance with incentive and utility program requirements and satisfy any ongoing monitoring and reporting obligations as specified in the agreements. This may include periodic reporting, performance monitoring, and adherence to program guidelines to retain incentives over time. Payments may be issued directly to the project owner, installer, or financing entity, depending on the program structure.

Routine Maintenance (Seasonally - Annually)

Regular visual inspections and preventative maintenance of PV modules, batteries, inverters, electrical wiring, and other components to identify signs of damage, degradation, or malfunction. Periodic cleaning of solar panels to remove dirt, dust, pollen, bird droppings, and other debris that can accumulate on the surface and reduce energy production. Vegetation, leaves, snow, or other obstructions must be cleared from around the solar array to ensure optimal sunlight exposure and airflow.

Phase 3: Exit Strategy or Decomissioning

The operational lifespan of solar and storage systems typically extends beyond 25 years. This could cause some apprehension as business strategies and priorities might shift over time. However, just like investing in any capital asset, various exit strategies are available for organizations who no longer plan to maintain ownership or continue operation until the system’s end-of-life (EOL).

Sale of the System

This exit strategy involves selling the system to a third party, such as another business, investor, or renewable energy developer. The sale may include the transfer of ownership rights, equipment, contracts, and associated assets, with the buyer assuming responsibility for operation, maintenance, and future revenue streams.

Lease/Contract Transfer

If the system is leased or financed through a power purchase agreement (PPA), the lessee or off-taker may have the option to transfer the lease or PPA agreement to a new owner or entity. This allows for the continuation of solar energy production and financial benefits under the existing contractual terms. Otherwise, parties involved can negotiate early termination, buyout options, or assignment clauses to facilitate the transfer of ownership or contractual obligations.

Included with Property Sale

If the commercial property housing the system is sold or transferred to a new owner, the installation may be included as part of the property transaction. This may influence the property's value, marketability, and attractiveness to potential buyers, with the solar and storage system serving as a value-added asset or revenue-generating feature.

Refinancing or Recapitalization

In some cases, owners of the system may opt for refinancing or recapitalization strategies to access additional capital, equity, or financing options. This may involve restructuring existing debt, securing new financing arrangements, or attracting investment to support ongoing operations or expansion plans.

Retrofitting or Upgrading

Alternatively, the system may be repurposed, upgraded, or reconfigured for continued use in a different location or application. This may involve relocating solar panels, integrating new components, or adapting the system to meet changing energy needs, technological advancements, or regulations.

EOL Management and Decommissioning

Decommissioning is carried out at the system's EOL or if the system needs to be replaced or removed due to changes in site conditions or technological advancements. This may involve dismantling and removing equipment, disposing of, or recycling materials, restoring the site to its original condition, and complying with regulatory requirements for decommissioning and closure.

Throughout the lifecycle of a commercial solar and storage project, effective project management, stakeholder engagement, and collaboration among various parties, including developers, engineers, contractors, financiers, regulators, and end-users, are essential to ensure successful project execution, operation, and maintenance.  

Choosing the Right Project Partner

Evaluating an Engineering, Procurement, and Construction (EPC) contractor for C&I solar and storage projects involves assessing various factors to ensure the contractor's capability, experience, and reliability in delivering a successful project. Here are some key criteria for evaluating an EPC:

Experience and Track Record

  • Review the EPC’s portfolio of past projects, particularly commercial-scale installations similar in size, complexity, and scope to the proposed project.
  • Evaluate their track record of successfully completing projects on time, within budget, and to the satisfaction of clients.

Expertise and Qualifications

  • Assess the technical expertise and qualifications of the EPC team, including engineers, project managers, electricians, and other key personnel.
  • Verify their certifications, licenses, and accreditations relevant to system installation, electrical work, safety standards, and quality assurance.

Financial Stability and Resources

  • Evaluate the financial stability and resources of the EPC, including their bonding capacity, liquidity, and ability to secure project financing if necessary.
  • Confirm their insurance coverage, including liability insurance, workers' compensation insurance, and performance bonds to protect against unforeseen risks and liabilities.

References and Reputation

  • Request references from past clients and partners to obtain feedback on the EPC's performance, professionalism, communication, and overall satisfaction with the project outcomes.
  • Research their reputation in the industry, including reviews, testimonials, and ratings from industry associations, regulatory agencies, and online platforms.

Technical Capabilities and Innovation

  • Assess the EPC's technical capabilities, innovation, and ability to integrate advanced technologies, such as optimization or monitoring software, EV charging, microgrids or building management systems into solar and storage projects.
  • Evaluate their approach to design optimization, energy modeling, system performance analysis, and value engineering to maximize project efficiency and ROI.

Project Management and Execution

  • Review the EPC's project management processes, methodologies, and tools for planning, scheduling, budgeting, and risk management.
  • Evaluate their ability to coordinate with suppliers, subcontractors, permitting agencies, utility providers, and other stakeholders to ensure smooth project execution and compliance with regulatory requirements.  

Safety and Quality Assurance

  • Assess the EPC's safety record, protocols, and commitment to maintaining a safe work environment for personnel, subcontractors, and site visitors.
  • Review their quality assurance procedures, including material selection, installation standards, inspections, testing, and commissioning processes to ensure compliance with industry standards and best practices.

Contract Terms and Conditions

  • Review the EPC’s contract terms and conditions, including scope of work, deliverables, warranties, performance guarantees, payment terms, and dispute resolution mechanisms.
  • Ensure clarity, transparency, and alignment of expectations between your team and theirs to mitigate risks and facilitate a successful partnership.

By thoroughly evaluating these factors, organizations can make informed decisions when selecting an EPC for their cleantech projects, ensuring the project's success, performance, and long-term value.

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