After issuing a request for proposal (RFP) for a clean energy project or purchase, you should begin receiving proposals from respondents. Evaluating these proposals can be complex: knowing what level of project quality to expect, what types of responses to look for, and how to compare information across proposals can all make proposal evaluation a challenging process.
The guidance below addresses these and other questions about proposal evaluation to help you make a confident decision about your clean energy project or purchase. The National Renewable Energy Laboratory also offers a clear, quantitative Solar RFP Proposal Evaluation Matrix (xls) to support your decision-making process.
- Costs & Financing
A key proposal element to evaluate is the cost of the project, or the cost of the electricity you will purchase from it. Specific considerations can include a wind or solar project’s size, expected energy production, and cost per watt, or a power purchase agreement’s per-kilowatt-hour cost of energy, any periodic increases (“escalators”), and the purchase agreement’s impacts on your current and projected energy bills. Regardless of project type, it will be important to understand the proposal’s expected levelized cost of energy.
Other important cost information in a proposal could include operations and maintenance costs and any initial or final payments required. A project’s financing costs, as well as the respondent’s ability to provide or procure financing in a timely manner, may significantly impact overall costs as well. Proposals also should be as transparent as possible in their methodologies for calculating and demonstrating these cost data.
Another proposal element to evaluate is respondents’ past experience. As with any service provider, relevant experience is one key metric for evaluating a clean energy project developer capable of delivering a successful project.
Specific information for evaluating a respondent’s experience includes the company’s background and business history, along with the project personnel’s experience and qualifications. Has the developer been in business for many years? Have project staff previously worked on a number of similar transactions? Do project staff have the necessary training, technical skills, and project management capabilities, including managing multiple projects at once, where relevant? Evaluating a respondent’s prior experience also extends to a company’s safety record, including any recent history of claims or judgments.
Respondents’ experience with renewable energy project financing is another important variable to evaluate. Developers’ demonstrated track records of securing financing for other, similar projects, and of working successfully with financing partners to complete projects, are valuable metrics for assessing the likelihood of success with your project.
A proposal should also include references that reflect a respondent’s experience at all phases of the project and speak to their work on similar types or sizes of projects or purchases. The relevance and quality of these references are additional metrics for evaluating a respondent’s prior experience.
Proposal evaluation also includes assessing the comprehensiveness of each respondent’s project plans. Are the proposals complete and thorough? Have respondents answered all questions and provided all information requested? Do they offer clear, reasonable plans for key project steps and needs, such as availability, quality, and warranty of equipment and materials like solar modules or inverters?
Respondents’ proposals should demonstrate this preparedness through technical plans and documentation for the proposed project. These plans should account for conditions at the proposed project site, including available space, proposed project layout, electrical diagrams, and other construction details specific to the site and project. They also should include a project safety plan.
Additionally, strong proposals will clearly identify and sequence steps of the project and the activities they entail and will account for sufficient time between steps, for example, to allow for any review time by relevant authorities. Proposals should include plans for complying with local and state policies, like permitting, interconnection, and any local hiring requirements. Respondent proposals should also address project monitoring systems and plans for ensuring accurate performance, including through your ability as the customer to monitor project performance and data.
- Summary of Key Metrics
In addition to considering these variables as you review proposals, you may also find it helpful to summarize key data points across proposals. These could include metrics like a project’s expected annual electricity production, its size, price per watt, or power purchase agreement price or escalator percentage. Comparing these numerical data points side by side may offer a useful, at-a-glance way to assess differences among the proposals.