Guest column: How bulk-buying solar panels impacts lifetime project value 

All eyes are on the global renewable energy transition as an effort to curb climate change, and there’s no time to waste on getting new projects up and running. Maximizing the speed of deployment and profitability of solar projects is critical for developers to facilitate the growth of our sustainable energy infrastructure.

Yet, typical approaches for solar module procurement, a critical lynchpin in project development, have remained stuck in the past. Most utility-scale buyers still rely on manual, offline processes that take weeks or months to compare procurement options, wasting hundreds of hours across procurement, engineering, legal and finance departments.

Slow-moving processes are incongruent with the dynamic nature of module pricing. This market is volatile and can shift on a dime. In addition, project start dates are notoriously challenging to forecast. Accurately predicting required module ship dates, even three months in the future, is difficult, and 12-18 months is near impossible. When looking at utility-scale solar projects, developers and IPPs often assume the most efficient way to combat volatility is by bulk-buying modules (by aggregating multiple projects) to achieve economies of scale. However, this couldn’t be further from the truth. This industry is constantly evolving, and the bulk buying strategy results in hundreds of millions of dollars in reduced profits, additional expenses and missed technology opportunities.

The most consistent winning strategy is to optimize procurement for each individual project. To do this effectively, buyers need tools with real-time industry insight to keep up with the latest innovations and procure the highest-value modules. A data-informed strategy enables buyers to evaluate options on a per-project basis and capture a higher lifetime project value.

The current state of solar procurement: What’s driving bulk buy appeal

To understand why many developers and IPPs gravitate toward bulk buying, it’s crucial to look at the current state of the solar industry and its limitations. Buying modules typically involves manually contacting a handful of manufacturers to gather prices and module information or hiring a consultant to run an RFP, perhaps with an expanded pool. With the industry’s dynamic nature, the quoted price for one day could shift the next. The results are costly; potential supply chain and availability issues, schedule impacts, project design rework and having to restart manual data collection with the same analog processes. To put it in perspective, buying modules in 2024 is a lot like booking plane tickets in the ’80s, playing phone tag with multiple organizations to get prices, and by the time you’ve checked out all your options, the information has probably changed significantly.

The solar industry has gravitated toward bulk purchases because buyers believe they will get a better upfront price for buying more megawatts at a time. Conventional industry knowledge has shown that economies of scale drive down product prices, which saves money. Yet, the convoluted solar supply chain and pricing landscape complicates this. In a bulk buy, procurement professionals garner modules for multiple projects up front, often months or years in advance. From there, buyers are locked into larger, longer commitments with higher project deposits and can face unforeseen inventory and storage costs. Buying in bulk ahead of time also means that modules must be stored accordingly until the project is ready to launch, and warehouse space alone is responsible for millions in additional capital. These hidden costs are significant but rarely accounted for in the planning process.

The limitations of buying in bulk  

While bulk buying might reduce the time needed to buy equipment, this approach involves financial risk. No two solar projects are the same. If you cannot procure modules at precisely the right time, the product could be of a less-than-ideal size, glass thickness, technology, impact or other characteristics important for optimizing power generation. Purchasing one type of technology in bulk creates suboptimal product choices, leading to lower long-term project returns in the form of less power generation.

Additionally, at the gigawatt-scale, a buyer may make a much larger and longer commitment that could be rendered outdated by the rollout of new technologies. Look at TOPCon vs. mono-PERC: Mono-PERC panels have been the dominant PV modules for years, and purchasing multiple projects would likely lead to a bulk buy upfront. When TOPCon hit the market, it proved more efficient than mono-PERC. As a result, buyers who bulk purchased mono-PERC modules were left with a suboptimal product and a technological disadvantage.

At the core of every solar project is the need to maximize power generation, a feat only possible with optimal and customized product choices.

Data-driven per-project purchases

Many buyers are strapped for time and lack the resources to tailor optimized purchases on a per-project basis. Getting the best module deal on a project requires clear insights into nuances and niche project specificities. Real-time data insights are the only feasible way to keep up with the rapidly evolving market.

Digitizing utility-scale solar procurement gives buyers an advantage in the convoluted solar supply chain and pricing landscape. Receiving instant data-informed feedback on products and pricing keeps buyers up-to-date on available equipment, further enhancing customization for the specific project.

Data-driven insights also make way for improved value metrics. The solar industry has historically used dollar-per-watt module pricing as the main financial metric used in decision-making. While this provides the upfront cost for a module, it can’t give an accurate picture of its lifetime value. With the most up-to-date industry information, buyers can take module costs, installation costs, and the present value of production revenue into consideration, all of which are possible with Anza’s Effective $/Watt metric.

The renewable energy transition is accelerating, and to meet ambitious 2030 U.S. renewable energy targets, the way the solar industry approaches module procurement needs to change. Leveraging data analytics can ensure optimal returns, which in turn helps developers attract investment and financing, and ultimately fosters the expansion of new solar initiatives. A new approach to solar procurement will help the solar industry to remain resilient as we aim to expand renewable energy at a larger scale.

Mike Hall serves as Anza’s CEO. He began his renewable energy career in 2002 when he co-founded Borrego with his brother, Aaron, and Chris Anderson. In 2021, Mike co-founded Anza in order to help IPPs and developers save time and increase profits by improving access to supply chain data and analytics. Today, Mike’s focus is building Anza’s platform to help the entire industry achieve superior project outcomes.