In-House versus Outsourced Engineering Services
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The US solar market is far from monolithic. If you look at the top 10 states for solar, California’s installed capacity is roughly equal to the combined capacity of the next nine states. At the other end of the spectrum, you have states like North Dakota and South Dakota, which have less than a megawatt of solar capacity combined, that barely register as emerging markets. This market diversity calls for diverse business models.
Given this situation, it is no surprise that solar companies take different approaches to engineering services. For this article, I reached out to engineering service providers, small and large, as well as some solar installation companies, to better understand the pros and cons of outsourcing engineering services versus developing these capacities in-house.
Director of Innovation and Technical Excellence
Sun Light & Power
Sun Light & Power (sunlightandpower.com) designs, builds and maintains commercial PV and solar thermal systems. The company has installed more than 4,000 solar systems since 1976, focusing on the greater San Francisco Bay Area and covering all of California. Market sectors served include solar for businesses, government agencies, hotels, multifamily housing, nonprofits, schools and universities, and spiritual centers.
SP: How does Sun Light & Power meet the company's engineering needs?
BG: We have five California-licensed PEs on staff and one more literally across the hall. In addition, we have several full-time solar designers. With this group, we are able to design and engineer almost all our projects. Within our service territory, requirements for PE certification vary significantly among AHJs and customers. Some AHJs require every sheet in a plan set to have a PE seal; many require a structural engineer’s seal on the structural sheets only; a few require an electrical or mechanical engineer’s seal on the electrical (PV) or mechanical (solar thermal) sheets. A few AHJs require PE seals for projects larger than a given threshold. In addition, certain customers may have requirements for PE certification, most often for projects subject to an RFP process or projects for PPA developers and financiers. Public projects often have specifications or other contract language requiring PE certification. Our current standard is to provide structural PE certification on most permit drawing sets, whether required or not. They would be required by one entity or another 80% of the time.
SP: Has Sun Light & Power always had in-house engineering capabilities?
BG: Having the engineering expertise in-house has been a key part of our business model for more than 40 years. Our founder, Gary Gerber, is a licensed mechanical engineer. When Gary founded the company in 1976, he not only was an industry pioneer but also designed solar thermal systems in-house. When grid-tied PV started to be a serious part of the business 15–20 years ago, we were building a lot of residential systems and had an in-house designer with an architecture background doing CAD work for permit drawings. At that time, PE certification was not required. As we started moving toward more commercial work around 2004, we hired a PE and officially launched our engineering department. For many years following, we outsourced structural engineering when necessary, until we hired our own in-house structural engineer.
SP: Does having your own in-house engineering department provide Sun Light & Power with a competitive advantage in the market?
BG: Yes, starting precontract, during project development and estimating, we benefit from in-house design and engineering expertise. We call our salespeople “design consultants” because they really do help identify the best solution for the customer. Our top salespeople individually have more than 15 years of solar experience. If they need help optimizing or identifying a custom solution, they can call on a senior engineer during the sales phase. Further, with in-house engineering, we are better able to adapt to field conditions, serve our installation crews, improve our designs based on knowledge gained from our specific field experience, and do the custom, often iterative work our customers demand.
SP: Are there any scenarios where you outsource engineering services?
BG: On some projects, we do. When our in-house engineering team is overloaded, we use outsourcing as a pressure relief valve. We do not currently have an electrical engineer on staff, so for the rare occasion when an AHJ or contract specifically requires a professional electrical engineer, we outsource that part. We sometimes use third-party structural engineers for carports and ballasted systems, especially where the manufacturer or supplier has worked closely with a particular engineer in the past. Finally, when we need an engineer with expertise in a particularly challenging AHJ—such as Los Angeles—we sometimes outsource engineering on complicated or leading-edge projects.
SP: Does Sun Light & Power ever hire design service providers that are not licensed professional engineers?
BG: On occasion, we take on small projects for certain VIP customers. Our internal process is optimized for larger projects and our capacity is limited. If we take on a residential project that doesn’t require PE certification, we may outsource the permit package to a solar design service. The ones we work with have very quick turnaround times and can provide permit drawings for a very low cost.