In this three-part blog series, we review the steps needed to write and run an effective request for proposal (RFP) for a solar power installation. In the first part, we defined an RFP, the RFP process, and the roles and responsibilities needed to manage the RFP. In part two, we will review how to gather RFP requirements and the components needed to create an effective RFP document.
Gathering RFP Requirements
An RFP is a valuable tool for identifying and procuring third parties to help with important projects. Requirements are critical to a successful project because they provide vendors with background and context to understand essential business needs. Ideally, requirements should focus on the problem domain, giving vendors the opportunity to develop creative solutions.
When gathering requirements from key stakeholders, consider these four areas:
- Purpose – Ask stakeholders to describe the business need. What challenges do they need help solving?
- Goal – Explain what the business wants to achieve. Ask stakeholders what role the vendor will play in helping the business succeed. What would a successful outcome look like?
- Evaluation criteria – Capture the most important factors of the solution. Consider how you will score the proposals. What information will help you make a decision?
- Nice to haves – Identify must-haves and nice-to-haves, which are above and beyond the core requirements of the solution and not needed for a successful bid.
Components of an Effective RFP
Requirements that should be included in most solar RFPs, include:
Goals and objectives – By defining business goals, the RFP can focus on outcomes that align with organizational objectives. Explain what the business wants to achieve. Explain the role the vendor will play in helping the business succeed.
Budget – Know how much you are prepared to spend. Differentiate between what you need versus what you might like to have. Ask vendors for their costs, payment dates, and terms. In some instances, zero-cost options may be available. It is good practice to ask vendors to provide options that require no upfront capital.
Deliverables – Without detailing the solution, explain what you expect the vendor to provide.
RFP timeline – Provide deadlines for proposals, evaluation, selection, negotiation, and project completion.
Evaluation criteria – Capture the most important factors of the solution. Consider how you will score the proposals. What information will help you make a decision? To accurately compare proposals, establish clear valuations and standard metrics.
Common ways to value a solar project include:
- Net present value (NPV)
- Internal rate of return (IRR)
- Lowest levelized cost of energy (LCOE)
- Greatest energy production
- Greatest environmental benefit
- Local labor or job creation opportunities
Experience, licenses, and qualifications – Ask about the respondent’s experience in terms of years in business, total megawatts of solar installed, etc. Request company licenses, insurance, and bonding to ensure the vendor is reputable and to reduce your legal liability.
Technology – Request detailed descriptions of technology and equipment, including warranty information, so that it is clear which components will be used and who is providing them. The equipment used in the system should meet applicable product codes or standards. Require that systems meet both the national electric code and international building code as applicable.
Site specifications – Provide accurate information of available sites for solar power to help respondents create the best proposals. Require respondents to obtain permits, interconnection agreements, and other regulatory approvals.
Include copies of applicable local ordinances or unique regulatory requirements, detailed information on local permitting practices, and any permit application forms.
Operations and maintenance (O&M) – Having agreements in place can help to ensure that the installed system performs according to expectations. Because not all vendors provide O&M services, include a requirement for O&M training and manuals.
RFPs are an important part of the procurement process because they provide the due diligence businesses require to consider their needs and for vendors to design their solutions. In our third RFP blog, we’ll examine how to evaluate vendors, select a winner, complete a contract, and more.
Developing and running an RFP can be complicated. We can help advise you on the process, from identifying goals to selecting the winning bid. To learn more, contact us for information.