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Building a solar installation is your dream, not only generating power for your customers, but moving you to the forefront of an energy revolution. However, you’re asking yourself how to do it, and who can help?
As we look forward to 2015, we will see the solar installation industry grow even larger to accommodate residential, industrial, community and commercial operations. With all this activity, there will be commercial developers who are seasoned, along with independent private investors looking to get in on the activity.
There are many aspects that can derail a project that, on paper, pencils out to be a good investment. Factors such as design schedule delays, material procurement issues, and on to final construction issues can all contribute to a poorly run project that will end up making you wish you had never started.
So that begs the question, what kind of person or company can help from the start of a project? This may be an option where Engineer, Procure, Construct (EPC) consultants can step in and come to your rescue. If you’re lost, an EPC can help you find your direction.
What Is An EPC?
Let’s focus on a commercial installation and the advantages of the types of implementation techniques available: EPC, E/PC, EP/C and E/P/C. You’ll notice that I have given a few different arrangements for EPC, with a slash between the letters. That’s because, in its purest form, EPC can be combined in several ways. Each arrangement detailed below is individual in its application, but somehow they all use the same three letters, which may lead to some of the confusion behind the term.
EPC, or engineer-procure-construct, defines the stages of a project and how it is executed. You can combine all three aspects however you would like to complete your project. How those aspects are combined imply different strategies in how you approach your project.
- EPC This is the most straightforward form of EPC, where you hire a firm to design your system, procure the equipment and construct the site. Everything is done under one contract, leaving you with one bill to pay.
- E/PC If you are not comfortable handing off your whole project to one firm, you could choose to keep the engineering in-house, subcontracting out procurement and construction.
- EP/C Another option is to keep engineering in-house and purchase major equipment, then hiring a contractor to purchase minor equipment and construct the installation.
- E/P/C If you are a serious micromanager and are uncomfortable with giving one institution, including your own, full authority on a project, you can hire three different parties and let them each handle one task.
Which form to choose is dependent on your individual project goals. Each one has its advantages and has been listed in increasing order of your employees’ engagement and time requirements. Firms capable of providing EPC services have bonding abilities to cover the full engineering, procurement and construction of your project.
Why Go The EPC Route?
From a developer or investor stand point, where knowledge may be limited, it is often easier to go the EPC route, as you only have one contract and you rely on a competent firm to take care of the project’s details. With one contract, you typically only have one point of contact, which relays into one meeting and ultimately takes less of your time.
If you are less concerned about operation and more concerned about getting your project built, EPC is the route for you. However, there is a school of thought in the industry that it is better to engineer first, then get your balance of plant (BOP) consultant on board. This gives you a jump start on your specifications and design so you can hit the ground running. This approach also allows you to choose the engineer you want to work on your project. If you truly want an EPC and are set on an engineer that knows your business, you can always assign your engineering resource to your contractor, essentially locking your engineer in on the project as a fixed cost.
Generally, with a true EPC, you are going to get the sub-consultants your EPC consultant chooses. You may end up with more sub-consultants that you expected, however this is part of the EPC consultant’s role, which is to get the project completed at the price and schedule you agreed to.
This sometimes leads to the EPC consultant subbing out sections of work to companies that can do it faster and more cheaply. Again, you are relying on the EPC consultant’s network and experience to pull you and your project through to completion.
What Can An EPC Do?
When you sit back and look at all of the items that need to take place on a commercial installation, the game really only begins after you negotiate your interconnection agreement (IA). After you have the IA, you’ll need someone to work with engineering, write equipment specifications, procure (and often store) your project equipment, as well as construct, test and commission the project.
If you have little to no knowledge on the specifics of the industry, but have the right financial backing and application, you can hire an EPC firm to take your project through to fruition. A good EPC firm has the knowledge, industry contacts, and sometimes the right vendor leverage to get your project built for an acceptable price and on schedule. With a long list of contractors, engineers and vendors at their disposal, these firms know what you need before you do and can help guide you through the implementation process.
Choosing Your EPC
A good EPC will have a strong capability in one or more of the three areas: engineering, construction or procurement. When it comes down to it, you need an EPC firm you can trust. EPC firms typically move fast, often faster than you can keep up with. You need to trust that they are acting in your best interest and that they are invested in making sure you are successful.
You need a firm that is rooted with good communication practices so they can take time to walk you through the process. You also need a firm focused on educating their clients so you leave the process better informed than when you came in. Ask around your industry community and start the conversation and relationships before you get started. People generally recommend firms who they trust and good firms with good reputations are widely known.
By Michael Kraft, PE, account executive at Ulteig, an engineering, land services, project management and consulting firm headquartered in Fargo, N.D. Michael has extensive experience in developing renewable energy, energy storage and electronic power solutions for his clients.