NREL Leads Charge to Standardize Solar Contracts

Solar industry stakeholders have developed standard contracts to assist greater market penetration. The contracts are intended to help lower transaction costs and make it easier to access low-cost financing for residential and commercial solar power projects.

The Solar Access to Public Capital (SAPC) working group, assembled by the Energy Department’s National Renewable Energy Laboratory, is a consortium of solar energy developers, law firms, financiers and analysts with expertise in solar energy projects.

The contracts cover residential leases and commercial power purchase agreements (PPAs). Customizable contract templates are seen as ways to improve consumer transparency, increase private-sector investment, and lower the cost of solar energy to end-users.

NREL believes the business opportunities will increase for national and regional solar developers with these templates. These will also help create tradable investment vehicles desired by pension funds and other institutional investors critical to scale the industry.

To date, SAPC has developed three standard contract templates:

• Residential Lease – Aggregated (for developers with in-house installation practices)
• Residential Lease – Disaggregated (for developers using installation partners)
• Commercial PPA

NREL initiated the SAPC working group effort in October 2012. Since then, it has grown to include more than 120 member organizations. The working group is also engaged in several activities designed to build investor confidence, including collaborating with rating agencies to evaluate “mock” portfolios of residential and commercial assets, developing best practice guidelines for system installation and operation and maintenance, and developing a system performance dataset. The three-year effort is funded under the Energy Department’s Sunshot Initiative.