Stoel Rives Helps Launch Solar Industry's First EPC Contract Template
SolarTech, a non-profit private/public consortium, recently announced the solar industry’s first engineering procurement and construction (EPC) contract template for solar financing. Whereas a PPA (power purchase agreement), loan agreement or operating lease agreement handle the front-end financing relationship, the EPC agreement handles the execution phase of the project. The template was developed by the SolarTech Finance committee, with the support of my colleague Howard Susman, and is projected to reduce contract negotiations by 50 to 75 percent.
In SolarTech’s announcement, Howard said that “our guiding principles in developing this form were, first, to achieve sufficient balance in the allocation of risks that both contractor and owner would feel comfortable with the terms, and second, to include provisions typically acceptable to the financial community, without whose acceptance, there would be no projects at all.”
You can download a copy of the EPC contract template here (free for SolarTech members; $395 for non-members).
DOE to Fund up to $50 Million for Innovative, Cost-Competitive Solar Energy
Today, the Department of Energy issued a Notice of Intent regarding funding of up to $50 million to test and demonstrate innovative technologies that will lead to cost-competitive solar energy technologies. The Nevada National Security Site will be the test site for cutting-edge solar technologies which can be deployed in the Southwest areas of the United States where there is an abundance of solar energy.
The Funding Opportunity Announcement (Reference Number DE-FOA-0000233) won’t be issued until early next year but you can look at the Notice of Intent by going to https://www.fedconnect.net/FedConnect/ and plugging in the Reference Number. Stay tuned for more information via this blog or in a client alert.
California Solar Initiative Handbook Update: Warranty Requirements
Morten Lund reports:
The California Solar Initiative Handbook was updated June 8, 2010. The new version can be found by clicking here.
Of particular interest are changes to Section 2.4 (warranty requirements). These changes are not necessarily substantively significant, but may require some manufacturers and contractors/installers to conform their warranty language in order to ensure continued eligibility for CSI payments.
CPUC Approves 500 MW PG&E Program
The California Public Utilities Commission ("CPUC") has given the green light to a five-year solar photovoltaic program to develop up to 500 MW of solar PV facilities in Pacific Gas and Electric Co.'s ("PG&E") service area.
The program is designed to allow PG&E and third parties to develop PV facilities:
- Under the utility-owned part of the program, PG&E may install up to 250 MW of PV facilities over 5 years, at a rate of 50 MW per year. Each facility will have between 1 and 20 MW of capcity and will be located in PG&E's service area. The CPUC has allocated up to $1.454 billion for capital costs which will be adjusted if PG&E develops less than 250 MW over the five-year duration of the PV program. PG&E will solict competitive bids for the construction of the facilities, which it will own and operate.
- Under the third-party-owned part of the program, PG&E can solicit energy from up to 250 MW of PV facilities which located in PG&E's service area and which are owned by third parties - same size and annual installation restrictions apply. Pricing for this portion will be based on competitive bids, with the successful bidders entering into a 20-year power purchase agreement with PG&E.
In an effort to secure good rates, CPUC is requiring PG&E to use an independent evaluator to review the bids on both parts of the program.
PG&E built a 2 MW pilot project in Vacaville, CA to demonstrate the viability of this program. The CPUC decision allows PG&E to recover the costs of construction the pilot project.
Colorado Increases its Renewable Energy Standard to 30% by 2020
From our colleague Adam Walters:
In February we blogged about Colorado HB-10 1001, a bill then pending in the Colorado legislature that would increase Colorado’s Renewable Energy Standard (RES) from 20% to 30% by 2020. The Democrat-sponsored bill was passed by the legislature on March 11 on a party line vote and yesterday it was signed into law by Colorado Governor Bill Ritter with great fanfare.
With the passage of this law Colorado now has one of the most ambitious RES’s in the country, and second only to California’s 30% requirement.
In addition to increasing the State’s RES, the law attempts to assist in job creation in the solar installation industry by placing greater emphasis on distributed generation (DG). For instance, the law requires Colorado utilities to spend 3% of its power purchases on distributed solar installations. The law also allows a utility to develop and own, as part of its rate base, up to 50% of the DG capacity it acquires from power purchase agreements and new construction if the cost is reasonably comparable to current market cost. The Public Utility Commission must also allow utilities the same cost recovery for the construction of new DG systems as allowed for new coal-fired facilities.
