By Joseph Tassone Jr.
August 8, 2024
As I write this article, I’m still waiting for a PTO (Permission to Operate) from the utility for a project leased in early 2018. Even the most conservative estimates wouldn’t have predicted that a relatively straightforward 7 MWdc community solar project would take as long as obtaining a master’s degree.
The Navy SEALs have a motto: “The only easy day was yesterday.” With a solid ITC (Investment Tax Credit) runway and numerous states offering substantial incentives, why does it seem increasingly difficult to complete a typical renewable project? I’m not even discussing wind or large-scale PV—just the average DG (distributed generation) community solar and Battery Storage projects.
In researching timelines for renewable projects, I found some data, but it’s often arbitrary and self-reported, making it hard to draw precise conclusions. Definitions of project initiation vary, and interruptions like moratoriums and utility cluster studies add further complexity.
Drawing from over 25 years in developing wireless telecom projects and originating hundreds of megawatts of PV and BESS projects in challenging markets like New York and Massachusetts, I’ve observed that timelines for renewable projects are indeed lengthening. Closings are delayed, financing takes longer, and administrative permits experience delay after delay. Despite these challenges, the sector remains promising with significant potential ahead.
Several factors are beyond our control: utilities extending study periods, municipalities imposing moratoriums, and even weather. These macro factors, combined with daily development hurdles, extend timelines from weeks to months and years. Last year, a closing was delayed nearly four weeks because the final state environmental commission approval was held up by someone’s vacation. Meanwhile, another project was delayed by months due to local IDA (Industrial Development Agency) scheduling issues.
Now, for some introspection—yes, we can do better.
In my over 25 years of experience in development and real estate, encompassing over 5,000 projects, I have rarely witnessed post-mortem analyses conducted on completed projects. In the wireless telecom sector, once a tower was built, we swiftly moved on, barely recalling the stress of meeting deadlines. The same pattern applies to renewables. As projects near completion, decisions are often made hastily, sometimes involving significant expenditures to address problems, and communication becomes more intense. However, many issues that arise later in the development process could have been resolved months or even years earlier.
For instance, title issues frequently surface just as the Notice to Proceed is ready. I have seen projects delayed by over 45 days because someone failed to follow up on a simple SNDA (Subordination, Non-Disturbance, and Attornment Agreement) from a junior lender. Addressing such issues proactively early on would prevent these delays.
Years ago, while consulting for a wireless carrier, my client encountered a situation where a municipality was delaying the issuance of a building permit, which in turn was delaying the start of construction. The carrier’s year-end goals were becoming jeopardized. I recall daily calls with executives joining in to offer solutions until the permit was eventually issued. This urgency was warranted at the time. Conversely, a week later, I questioned why it was taking a month for their legal to issue a draft lease and was largely ignored. This loss of over 30 days during the project lifecycle is irrecoverable and typically cannot be made up. Today’s delays cause tomorrow’s emergencies.
If asked whether a project could have been completed a day or a week earlier, most would likely say yes. But what about a month, or 3 to 6 months? Maybe. Often, we’re so focused on budgets and hurdle rates that we often forget that time is money. Every day a project isn’t operational, it’s not generating revenue and even losing money. Sprinting at the beginning, not just the end, is crucial.
Here are some tips and best practices to save time and resources:
- Develop a Detailed Project Schedule: Communicate not only major milestones but also key metrics like clean title and cleared due diligence.
- Early Due Diligence: Order title, zoning analysis, and cultural desktop studies early, even before site control, to identify red flags.
- Consistent Focus: Avoid putting projects on the back burner. Addressing early-stage issues prevents future crises. Review each project daily.
- Start the Closing Process Day 1 – know what is required to close a project at the onset to avoid any surprises at the end.
- Accountability: Hold yourself, your team, and vendors accountable. Set and communicate deadlines for all deliverables.
- Persistence: Follow up rigorously to ensure tasks are completed on schedule.
- Organization: Maintain orderly data rooms, uncluttered inboxes, and complete trackers to avoid confusion and wasted time.
- Resilience: Development is challenging, often feeling like a rollercoaster. Stay focused, disciplined, and persistent, even when setbacks occur.
In conclusion, while external factors contribute to delays in renewable energy projects, a significant portion of the responsibility lies within our control. By adopting proactive, organized, and persistent approaches, we can expedite project timelines, ultimately advancing our renewable energy goals more efficiently. Everyday counts, so let’s sprint from the start to ensure we harness the full potential of this promising sector.
Joe Tassone Jr. is founder and a principal of Oncore Origination and has over twenty-five years of project development experience. Visit www.oncoreorig.com for more information.
