With so much uncertainty in the commercial and industrial solar market, how can you be sure that the projects you’re working on today will pencil out tomorrow? While no one has a crystal ball, we at Catalyze believe the long-term prospects for solar and storage are brighter than ever. However, to capitalize on these opportunities, it’s crucial to have the right partners.
Commercial and industrial solar development can be tough in any environment. Volatile markets, policy shifts, unreliable supply chains and the occasional pandemic can all seem to conspire against even the best efforts to keep your pipeline churning with profitable projects.
Solar industry growth faltered in Q2 due to the coronavirus, according to the latest U.S. Solar Market Insight report. Non-residential solar installations in particular are expected to decrease by 38% year-over-year by year’s end because of work stoppages and permitting delays caused by economic disruptions.
There are bright spots on the horizon, however. As we wrote last month, in the commercial real estate industry, the industrial sector seems to be absorbing some of the shock as the pandemic induces an acceleration of e-commerce. The increased electricity demand and rising sustainability consciousness of owners of these industrial spaces may translate to a new surge in onsite solar and energy storage projects. When it does, those with ready access to capital and strong execution capabilities will reap the rewards.
It Takes A Village
As any seasoned solar developer knows, it takes time and legwork to build a strong project pipeline. Local policies, electricity pricing, supply chain costs and customer demand must all be pointing in the same direction for a project to provide true value. To keep your deals moving at a steady clip in the current climate, you need a partner with ready financing and the experience to get projects done. But financing and experience are just the tip of the iceberg.
Besides deep pockets and deep experience, what are some of the qualities to look for in a renewable energy development partner?
Quality #1: Skin in the Game
Financing that is here today may be gone tomorrow, so in this environment it pays to have a partner who is in this business for the long haul. Partners who provide PPA deals guaranteed by lower cost capital have a vested interest in the effective execution and long-term success of your projects. Investment partners (like Catalyze) who are willing to share risk have bona fide skin in the game.
Quality #2: Long-Term Vision
Even more important is that your partner has a vision for clean energy that embraces new technologies that can add value to your projects over time. For example, while energy storage may not be in the cards for certain solar projects today, adding storage in a year or two may be economically beneficial. Working with a partner who shares the benefits of added smart energy resources means your margins can improve over time.
Quality #3: In-house Intelligence
In the C&I solar market, we are long past the days of driving by buildings to find the most optimal roofs. To truly scale your development process, you need a partner with in-house intelligence that goes beyond basic energy modeling to provide guidance on strategic decisions.
For instance, using the Catalyze platform, our team can analyze the long-term potential of any pipeline, helping to prioritize a large number of bankable C&I projects and disqualify those that aren’t worth your time. As your co-development partner, we can also provide a steady stream of well-conceived, designed and financed projects to collaborate on together.
Quality #4: Secure Supply Chain
Despite the rapid drop in solar technology costs over the past 10 years, the supply chain for solar modules and balance-of-system components will be difficult to predict as the market rights itself from the coronavirus. Choosing a partner with a proactive procurement strategy and a secure supply chain with competitive pricing will bring more stability to your development process.
Bottom Line: 1+1= 3
A good development partner does not split the pie; they make the pie bigger. Look for a strategic partner who has the same vision as you do, with solid financial backing and the confidence to ensure certainty and velocity in your development pipeline.
Ready to explore if Catalyze is the right partner for your C&I projects?