Request for Proposals – Metro East (Madison, St. Clair, Monroe Counties, IL) Solar Group Buy
Midwest Renewable Energy Association (MREA) is seeking qualified firms to submit proposals for the design, procurement, and installation of new, residential and commercial, direct-owned and power purchase agreement photovoltaic systems at a per-watt price lower than the prevailing single system market rate.
The group buy is being led by Midwest Renewable Energy Association. The goal of the group buy is to increase solar education and installations in Madison. Monroe, and St. Clair Counties through a group purchase involving free information sessions and a competitive selection process.
Between 2013 and 2018, the MREA facilitated twenty-two Solar Group Buy programs around the Midwest, reaching over 6,000 individuals with our Solar Power Hour information sessions, and leading to more than 7,400 kW on over 1,000 properties. Among those property owners who received proposals from partnering contractors, an average 42% purchased a PV system. To date, the average system size is 7.5 kW.
The group buy is offered with support of MREA, Madison County Resource Management, Lewis & Clark Community College, and Sierra Club with high visibility in Madison, Monroe, and St. Clair Counties. MREA will coordinate and deliver a minimum of 16 free, public Solar Power Hour information sessions and market them widely with physical posters, email blasts, paid social media promotion, yard signs, and in the press.
RFP Announced April 18, 2019
RFP Questions Due/Posted May 2, 2019
RFP Proposals Due May 9, 2019
Firm(s) Selected May 23, 2019
QUESTIONS & ANSWERS
Q: Regarding BUSINESS PRACTICES, Para C: NOTE 1: Please define what constitutes “Delivery of Equipment.”
A: Delivery of equipment means arrival of solar installation components to the installation site.
Q: NOTE 3: Regarding the requirement that the installer must provide production credit in the event that installation ends on or after 1 Jan 2020, is this in fact still true for those projects where the client is unprepared for installation to be complete before 1 Jan 2020? A non-exhaustive set of example scenarios include the client being away on vacation, the client planning to replace a roof before the solar installation, or the site is new construction that is not complete by 1 Jan 2020, all preventing either access to the site for solar work to commence in a reasonable manner before the 1 Jan 2020 production credit penalty would be imposed. Is it reasonable to expect relief from this requirement in scenarios similar to the examples given?
A: Yes, if the customer requests or requires a later installation timeline, at no fault of the installer, the production credit is not necessary.
Q: NOTES 4: Clarification is requested here. #1: Can you confirm that this penalty is imposed only in those cases where the client would have been eligible for more than a 26% FITC (seems unreasonable to be required to pay a penalty when the client was not eligible to receive the full 30% benefit)?
Q: NOTE 5: After studying the IRS Guidance Notice 2018-59, it would seem that Part 2) of the note seems to include a contradiction or at a minimum less clarity that it could. Can you please state if the modified instance of the Original RFP Language is a more accurate expression of the RFP requirement in compliance with the IRS Guidance:
Original RFP Language: “NOTE: IRS guidance Notice 2018-59 provides two methods for determining the “commence- construction” date: 1) starting physical work of a significant nature or 2) meeting the “5 percent safe harbor test” by incurring 5 percent or more of the total cost of the facility in the year that construction begins.”
Modified RFP Language: “NOTE: IRS guidance Notice 2018-59 provides two methods for determining the “commence- construction” date: 1) starting physical work of a significant nature or 2) meeting the “5 percent safe harbor test” by PAYING OR incurring 5 percent or more of the total cost of the facility in the year that construction WAS SUPPOSED TO HAVE BEGUN.” Expressed alternatively, does MREA consider the “year that construction begins” to be 2019 in this case if 5% or more of the total cost of the system has been expended in 2019 and the client has been billed and paid for that portion of the project?
A: From IRS Guidance Notice 2018-59:
“SECTION 3. METHODS FOR ESTABLISHING BEGINNING OF CONSTRUCTION .01 In general. This notice provides two methods for a taxpayer to establish that construction of energy property has begun for purposes of the ITC under § 48. A taxpayer may establish the beginning of construction by starting physical work of a significant nature as set forth in section 4 of this notice (Physical Work Test).
Alternatively, a taxpayer may establish the beginning of construction by meeting a safe harbor based on having paid or incurred five percent or more of the total cost of the energy property as set forth in section 5 of this notice (Five Percent Safe Harbor).
Both methods require that a taxpayer make continuous progress towards completion once construction has begun (Continuity Requirement). Section 6 of this notice discusses the Continuity Requirement and provides a safe harbor for satisfying this requirement (Continuity Safe Harbor).”
Q: The very late program sales window end date of 31 Oct proximate to the 31 Dec must-complete date when combined with a potential rush of late-to-participate clients could impose significant winter-time stress on any installer supporting this program (especially when a typical residential installation requires 6-8 weeks of preparation for design, permits, procurement, etc). Please describe any measures MREA and the sponsors will be undertaking to prevent or accommodate this situation should it come to be. For example, can you describe the number of planned Oct Power Hours relative to other months or when the last Power Hour is scheduled to occur? Would MREA or the sponsors be willing to express or negotiate a maximum October sales volume above which the installer would no longer be required to meet the 31 Dec installation deadline?
A: Yes. This is open to negotiation with selected firm.