Students in HeatSpring’s newly updated Solar Executive MBA Training Course learn about how to take advantage of a standardized solar contract, one of the course’s important new features.
“If you use your own agreement, you need to find an investor comfortable with it,” says Chris Lord, instructor, along with Keith Cronin, of the Solar Executive MBA Training course.
That means the investor must spend the time and money to review the agreement, and will likely propose changes, even if you have already had the contract executed by the customer, he adds. “Using your own form, your project may not be as easy to finance.”
Investors Prefer Standardized Contracts
Investors will likely be more open to a project that involves a standardized Power Purchase Agreement (PPA), he says.
The course uses the Solar Energy Industry Association’s (SEIA) standardized PPA, which was created about two years ago and is gaining traction in the industry.
It’s designed for commercial end users and was created using a collaborative process with industry members and other stakeholders, according to SEIA.
“Investors familiar with the standard contract will feel more comfortable with how it manages risks and secures the customer’s ‘take or pay’ obligations. Investors spend less time and money reviewing your project, and you have a better chance of getting to ‘yes’,” says Lord.
Standard PPA Attracts More Bidders
The PPA, which changes as little as possible between users, gives developers and end users more options for financing and paves the way for more competitive pricing of projects. “It’s a good compromise between buyers’ and sellers’ rights, there’s less negotiation and more flexibility,” says Lord. And just as important, the contract helps developers and end users attract more competitive bidders.
Before Lord and Cronin began using the standardized PPA, they helped students look at different PPAs and discussed the benefits of various features.
Updated Solar MBA Course Also Includes Load Modeling Tool
Another important change to the Solar Executive MBA Training course is the inclusion of a load modeling tool. The tool helps users understand a client’s hourly usage of electricity and compare that to the production of solar for a behind-the-meter solar project. It can help potential solar customers uncover details about their usage they hadn’t considered before and find ways to cut costs by shifting load.
For example, one of Lord’s clients charged golf carts at day’s end. By pushing back the evening start of charging from 8 pm to after 9 pm, the client saved 3 cents/kWh. Additionally, the client spread the ramp up of charging and irrigation over a full two hours–rather than starting them at the same time–allowing for lower demand charges.
Assessing Projects for Storage
Lord says that the tool is also useful – if not required – to assess a project for storage. “You can’t assess a project for storage unless you can analyze a client’s load to see how closely electricity usage lines up with the solar production,” he says.
Take for example, the golf course resort, where the irrigation and electric cart charging occurred at night, and there was no net metering program.
“Under those circumstances, you can add all the solar you want, but it won’t help the client reduce its grid dependence if the production exceeds load during the day,” he says. The new tool allows users to plan and size storage systems for these kinds of scenarios.
Meeting the Needs of People Transitioning to the Solar Industry
By adding the standardized PPA and load modeling tools to the Executive Solar MBA Training course, Lord and Cronin have created a course designed to meet the needs of both existing industry members and the many new people wanting to transition to solar.
“We are seeing people with great intellectual knowledge who are subject matter experts in their discipline realizing that they want to do something more fulfilling and leave a legacy,” says Cronin.