Three Simple Steps to an Efficient and Accurate PPA/SSA Estimate
Updated: Apr 19, 2022
The goal of a financier like Solaris Energy is to provide potential customers of EPCs an easy and affordable path to going solar.
In addition to having the right pitch and presentation for a potential solar customer, striking while the iron is hot and providing accurate information are essential elements to closing a deal. One of the best avenues for accomplishing this is to follow this simple step-by-step process:
Step 1 - Get Initial Customer Information:
Knowing a few basic pieces of information about the customer and the project site is ideally the first item to complete on a list of early-stage interactions. This includes knowing the organizations decision makers, exact project locations, and ownership structure of the organization and the site. Hopefully these are quick and painless items you already obtain in initial contact with the customer.
Step 2 - The Big Four:
After getting customer and project basics, the next most critical step to get a rough estimate on PPA financing options is to send us the big four:
Utility Energy Only (kWh) Electricity Rate:
Knowing what the customer currently pays for energy helps give us a baseline or target for what price to beat and if the deal is realistic. If the customer is paying an average of 2 cents/kWh that is going to be a difficult project to pencil. If, on the other extreme, they currently pay 30 cents/kWh going solar will easily save them energy expenses. When the project is deemed viable, plugging the savings information into your pitch to the customer is a great way to close the deal. For defensible predictions, retrieve 12 months of bills since weather, operations, and utility rates can change throughout the year and narrow in on the energy only rate and consumption. Utilities often include demand charges, fees, riders, taxes, and other expense on the bill so clearly identifying the actual costs that are connected to the consumption of kWhs is important to get an accurate account of potential savings for the customer. As a partner in this, we can help figure this out with you, if needed.
System Size (DC):
The size of the project also plays into understanding how much the customer will save. Is the system going to cover close to 100% of the customer’s electricity or just a portion? In addition, there are many behind-the-scenes levers that feed in to the PPA rate based on the system size.
Turn-Key EPC Price:
This is the cost of everything involved in building the solar system. This includes costs of design & engineering, permitting, equipment, labor, taxes, and anything else that may be an expense of the project install. If you only have estimates on items, these should still be included, just flag to notify us that it may change.
Annual Production:
Production is inherently connected to the PPA price. It is easier to finance a south facing solar array than east or west. The cost to develop all options is the same, but the production is higher for the south facing systems. This leads to higher revenues, which allows for a better PPA rate (and more savings) for your customer.
Step 3 - Fill Out and Fill In:
When you’ve captured the above information it’s time to download and fill out an intake form. This form has several more fields for additional details about the project. Any other details that can be filled in are not necessary for a rough estimate, but if you have them they will help us obtain a more accurate price for your customer. This can reduce price fluctuations as additional information comes to light and ultimately help build trust with the customer as you move forward with the project. Walking the line of building that trust and moving on a project while customer interest levels are high is critical to a close and something Solaris Energy partners with you on every step of the way.
Want to learn more about selling (and building) more commercial solar systems with PPA financing? Check out our full training and contact us today.
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ABOUT SOLARIS ENERGY
Based in Fort Collins, Colorado, and grown from non-profit roots, Solaris Energy is an experienced, value-driven solar development, finance, and asset management firm, public benefit corporation and 1% for the planet member. The company accelerates the widespread deployment of distributed solar energy systems by offering non-residential customers low-cost financing to reduce their environmental impact, increase their bottom line, and participate in the worldwide shift to renewable energy. Solaris Energy’s dedicated team of passionate individuals has been providing these services since 2008, building a strong track record of proven and cost-effective renewable energy solutions across all sectors of energy consumers.
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