5 - Delivery Methods

When procuring a commercial-scale solar project, consider a Design-Build agreement that simplifies the contracting process and reduces your risk.


There are a number of project delivery methodologies available to implement a solar PV project. Design-Build or Design-Build-Operate delivery methods are typical for solar PV projects. This allows each solar design-build contractor to leverage their unique strengths in design, supply chain and construction for the maximum economic advantage. Design-Build also minimizes risk by creating a single point of contract responsibility. The following table gives an overview of the various project delivery methods.


Design-Build (DB)

Private company designs and builds solar PV project.

PROS
  • Single point contract
  • Lower risk
  • Competitive advantages utilized
CONS
  • Requires separate O&M contract

Design-Build-Operate (DBO)

Private company designs, builds and provides O&M for solar PV project.

PROS
  • Single point contract through operational phase
  • Lower risk
  • Competitive advantages utilized
CONS
  • O&M may not be core competency of DBO vendor

Design-Bid-Build (DBB)

Separate design and construction phases.

PROS
  • Direct project control through all phases.
CONS
  • Multiple contracts for each project phase
  • Greater risk
  • Slower to implement

Design-Build-Own-Operate-Transfer (DBOOT)

Third-party financed PPA or Lease.

PROS
  • Little upfront cost
  • Single point contract
  • Lower risk
  • O&M handled by PPA vendor
CONS
  • Financial performance compared to direct ownership 
  • "Hell or high water" lease payments, regardless of system performance
 

Procurement For Public Agencies

To select a Design-Build-Own-Operate-Transfer vendor, California Government Code Sections 4217.10 - 4217.18 should be utilized to allow a public agency to enter into an energy service contract, such as the purchase of a PV system, at their discretion. A competitive procurement process that is rigorous, transparent and fair is recommended for selecting the solar DBOOT contractor. This process is recommended for the following reasons:

  • The best pricing/design/results for solar PV systems are achieved in a competitive bid process where the bidders can utilize their unique strengths. This requires a Design-Build delivery method, a well-defined project in the Request for Proposals (RFP) and careful evaluation of the proposed systems.
  • By utilizing a transparent, open and fair competitive process the potential for heightened public scrutiny or vendor protest is greatly reduced.
  • The Design-Build process is preferable to Design-Bid-Build for solar PV projects because solar contractors have the opportunity to utilize their unique strengths if they have control of the design process as well. This results in more competitive bids and reduced risk to the public entity. In addition, project schedule, cost and management complexity are typically reduced with Design-Build delivery method for solar PV projects.
  • The Design-Build-Own-Operate-Transfer method realized as a PPA reduces risk because the payments are only made for the electricity produced by the system.
  • The lowest price bid often has real or potential issues which can be avoided by selecting a more responsible contractor.

 

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