Driving the Construction Phase
In my role as a CFO/COO of a national solar developer, I have acquired valuable insights into managing the site development process. These lessons have been integrated into the industry-specific software my company recently launched. www.devholderp.com
This article aims to support your efforts in swiftly and efficiently constructing Large-Scale solar projects.
This is where it gets complicated!
The Site Development team used up more than their allotted time.
Your CFO is pushing you to get the project completed this year to fulfill the company's obligation to the Tax Equity Partners, to get the financing money sooner and to keep your financial projections up to date at all times.
Your Structured Finance team is constantly slowing you down because they need more and better coordination of documents and progress with the financial institutions.
Your legal team continues to slow you down because you forgot to keep them up to date with timelines.
The EPC you chose is slowing things down because they do not have the necessary information and you are the bottleneck.
And finally you are under a microscope by the entire organization because the bonus pool is in jeopardy of falling apart!
The worst part is you have to do the same “Fire Drill” again next year and every year thereafter...is there a better way?
The answers are built into our software, but in the meantime, here are some essential strategies to consider:
Standardized Templates and Checklist. Utilize fully developed checklists and standardized templates to ensure everyone is on the same page. This helps avoid overlooking crucial tasks and helps with the ability to keep everyone informed.
Track Costs and Execution Dates Together. You will be spending a significant amount of money on each project in the portfolio. It is not uncommon to be spending $400MM to $500MM a year on project construction.
Most project management systems track execution milestones and costs completely separately. We developed our system to automatically track them together.
Ignoring cost tracking leads to excessive meetings with the finance team and poor cash forecasts and potentially holding up the project because the cash is not available.
Use a Project Management System with Dynamic Scheduling. Most project management systems use static scheduling. Static scheduling allows tasks to have a start date prior to today. The concept is very outdated and it gives a false reading on the progress of a project.
In the Large-Scale Solar industry, projects take at least a year to “Site Develop” and another year to COD. When using a system with static scheduling, the negative surprises will be endless!
It is always better to know and have the opportunity to react than to “fool yourself” and have “surprises” your company could not recover from.
It is hard enough coordinating multiple suppliers at the same time, doing so with a static system is almost impossible!
Keep Documents Organized and Accessible. Having an organized data room that can be accessed by inside and outside “Stakeholders” is one of the primary keys to success.
This requirement is so important, we built the data room right into the software. Imagine having a software that not only manages and forecasts project completions, but also provides for the accumulation and sharing of documents as part of the “workflow” of Site development and construction.
No more jumping between one system to store documents and another to manage the project…everything is under one pane of glass.
Construct Projects in one System. It is hard enough trying to figure out what your team is doing. Imagine working with an outside EPC on a project and you are both using different systems. Set up your system to allow for collaboration with partners.
Set Up Projects to Move Seamlessly to the Next Phase. The handoff from the Development team is crucial to the timely success of the project. Create a cohesive team that understands the importance of transitioning projects smoothly to the next phase.
One handover should not disrupt downstream departments. Working together should feel like a relay race where the baton is cleanly passed, not thrown randomly with a vague "good luck finding it" approach.
By implementing these strategies and leveraging the insights gained, you can effectively manage the construction process, maximizing efficiency and success in your construction of solar projects.
Sincerely
Jeff