4 Steps for Successful Solar Contract Management
What is solar contract management?
The SPVs or project companies that own the operational solar assets will have entered into multiple contracts. The most important agreements are the solar PPA (power purchase agreement), lease agreements, loan agreements, O&M agreements, interconnection agreements, EPC agreements and any incentive agreements. These agreements will contain obligations for the SPVs or project companies as well as for the counter parties.
What are the key steps for successful contract management?
Step 1: Capture
Collect all of your existing fully executed paper contracts
Scan the documents in searchable format
Upload them in a central, secure and visible place
Step 2: Update
Collect all amendments to the contracts
Put them in order and identify missing amendments
Summarise key amendment terms
Step 3: Analyze
Once you know where all your contracts are, the next step is to analyze important data in the contracts, such as information about your counter party, general contract terms and specific contract terms. This should be tailored for the type of contract you are dealing with, for example, positive and negative covenants for loan agreements or specific solar PPA terms.
Step 4: Audit
Identify compliance events: With tracking in place, you will identify your most important compliance events. These could be events like monthly reporting, making payments, sending out invoices, renewing contracts, producing debt service coverage certificates, renewing insurance policies etc;
Set compliance dates: Your asset managers will have a self-service wizard to create important compliance dates for the lifetime of the solar project. You will be able to assign individual responsibilities;
Operate: “Fingertip access” to contract terms and data allows your asset managers to ensure that all important compliance is met. Asset managers will receive weekly or monthly emails informing them of any compliance dates coming up and will receive email reminders if compliance dates are overdue;
Approve: You can set up an approval workflow process to ensure that compliance events are reviewed and approved by the right person;
Monitor: Your compliance officer will be track the overall compliance via customizable dashboards outlining overdue compliance or by email alerts.