Model RFP for Third-Party Solar

Local governments and schools are great locations for solar: large, flat roofs, lots of expensive electrical load, a commitment to sustainability, and a guarantee that they’ll never go out of business. However, since governments can’t take advantage of federal tax credits for solar, the projects often don’t pencil out financially.

Third-party financing is a popular means to overcome this barrier. It occurs in two forms: solar leases and power purchase agreements (PPAs). In the lease model, a customer pays a fixed amount over a set period of time. In the PPA model, the customer pays a fixed price per kWh for power generated. The kWh rate is typically lower than the local utility rate. In both cases, the third-party company owns, operates, and maintains the solar array and can tap into tax benefits not available to the public sector.

Another barrier is the complex nature of long term utility contracts. Local government and school officials are being asked to review proposals that are not apples-to-apples comparisons. Proposals can vary in array size and location, PPA rate and term, technologies utilized, and more.

With this in mind, CERTs collaborated with the City of Woodbury and KFI Engineering to develop a model Request for Proposals (RFP) that will enable local governments and school districts to more easily compare proposals. The model RFP contains traditional RFP language about the responders experience, qualifications, project scope, and schedule while also providing a comprehensive overview of technical specifications, site utility use, energy generation estimates, and more.

“Solar offers a great chance to be both financially responsible and good stewards of the environment,” said Bob Klatt, Woodbury’s Parks and Recreation Director. “I’m hopeful that lessons learned from our experience will be replicated across the state.”