A solar farm developer like Commercial Solar Design functions as the project coordinator, arranging the financing, design, permitting, and construction of the solar farm. The solar farm developer must be competent with many aspects of the solar farm project leading to a power purchase agreement. Commercial Solar Design offers services in areas such as; conditional use permits, initial review through CUP approval, interconnection application, engineering and drawings, scoping & system impact, legal work, CASIO SGIP / LGIP PPA negotiation, overall project management, construction financing, financial modeling, SPE formation, construction management, accounting & taxes and more. Given the complexity of a solar farm project it is no wonder why 90 percent of solar farm projects are destined to fail.
A solar farm works with the local utility which provides an interconnection from the solar farm to the grid. Solar farms are different from other systems because they do not utilize net metering but incorporate a production meter. Certain states have net metering requirements in place that provide a method of crediting customers who produce electricity on-site. A solar farm is not offsetting usage so it is strictly an IPP (independent power producer) generation facility.
Typically a landowner agrees to lease his property to a developer and allow solar panels to be installed on his property. The developer signs a power purchase agreement contract with the utility to purchase the solar power.
Solar power purchase agreement rates can be fixed, but they often contain an annual price escalator in the range of one percent to five percent to account for system efficiency decreases as the system ages and inflation-related costs for system operation, monitoring, maintenance, and anticipated increases in the price of grid-delivered electricity. A solar power purchase agreement is a performance-based arrangement in which the utility pays for what the system produces. The length of most solar power purchase agreements range from six years to 25 years.
An investor provides equity financing and receives the federal tax benefits. The investor and the solar developer form a SPE (special purpose entity) for the project to function as a company.
The EPC (Engineering, Procurement, Construction) company will help design the system, and may perform the follow-up maintenance over the life of the PV system. Once the solar power purchase agreement contract is signed, a typical installation can usually be completed in four to eighteen months.
Commercial Solar Design is focused on all areas of a solar farm project cycle. Contact them to discuss how they can help you with your solar farm project.