With major disruptions from the ongoing COVID-19 pandemic causing delays across the supply chain, having reliable equipment procurement is imperative to keeping a project on schedule. This is especially true within the solar industry due to a recent drop in photovoltaic module costs, an increased push toward decarbonization and greater uncertainty around regulations. The growth of utility-scale solar as a decarbonization tool for many corporations has resulted in increased competition between vendors and project owners alike.
The solar market is an ever-changing field with increasing development and investment opportunities in utility-scale solar farms across the U.S. The traditional project model of engineer-procure-construct (EPC) works well for a variety of industries, but an additional nuance may be particularly efficient for solar projects. An integrated EPC firm is more than an avenue for efficient project execution. These firms have procurement professionals that keep a pulse on rapidly evolving supply changes and have insight into the quantity and type of high-demand equipment available, influencing the equipment’s capacity and engineering solutions chosen for a particular project. Comprehensive knowledge of the products and markets, combined with strong vendor relationships, is crucial to attaining vital equipment in a timely manner.
Flipping the Approach
Conventional project design processes are based on engineering firms selecting equipment according to owner requirements or what that particular firm has experience with. An integrated engineering and construction firm can help with upfront planning and design by providing insight into the availability of critical equipment before project design and optimization occurs. An integrated engineering and construction firm can also optimize execution plans to allow for equipment procurement to happen even earlier than the already-efficient conventional and common EPC approach.
Competition for parts and equipment is prevalent in the solar industry. Having a company with a master service agreement with multiple vendors in the same category can help project owners secure their place in line for highly coveted equipment, bringing more certainty to project outcomes that not all conventional EPC firms can promise.
Bringing in Experience
Much of the equipment needed for solar projects comes from international vendors, which can be significantly impacted by volatile commodity pricing, material availability, tariffs and market demand. Additionally, finalizing a contract efficiently is key for procuring the items needed for a solar project. Having predetermined terms and conditions within established contracts can lead to less procurement time as vendors know there aren’t weeks or months of delay as teams negotiate.
Putting a down payment upfront on equipment or securing a production slot with an integrated EPC team can help project owners analyze the construction cost of alternate selections in real time. By having this information as early as possible, project teams can help determine the impact to capacity and whether it makes financial sense to continue forward with the planned course of action or if it’s time to pivot for another viable, optimized solution.
Solar construction is a complicated endeavor but one that can be simplified with comprehensive knowledge on your side. Discover how to make your next renewable construction project successful.