In-House versus Outsourced Engineering Services: Page 2 of 7
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Founder and Principal
Hamon Engineering (hamonengineering.com) is a small professional engineering practice in the San Francisco Bay Area that provides engineering and consulting services. Marvin Hamon is a professional electrical engineer. He has worked in engineering since 1993 and in the PV industry since 2004.
SP: What solar engineering services does Hamon Engineering provide, and who are your typical customers?
MH: We provide a wide range of engineering services including feasibility studies, project design, construction overview, commissioning witnessing, third-party review, owner’s engineering and general consulting. We provide electrical engineering services through in-house resources. Where projects require additional engineering resources, we can provide civil, structural and mechanical engineering by teaming with other professional engineers.
Our client base consists mostly of commercial, industrial and utility-scale PV project developers; PV financiers; commercial architects; large PV contractors; state and municipal governments; equipment manufacturers; other engineering firms; and utilities. Residential or small commercial PV contractors rarely contact us. The larger and more complex the project, the greater the benefit of engaging an engineering team. Our solar contractor clients tend to come to us because a local AHJ requires that a PE prepare the project design, or they want to mitigate risk, or they need our specialized knowledge to complete a project successfully.
SP: What is the benefit or value proposition of outsourcing professional engineering services?
MH: All but the largest design-build construction companies are well served by outsourcing professional engineering services. In fact, even the largest companies will still outsource as a way to spread out project liability. It is difficult to come up with enough year-round work to keep a professional engineer occupied. If there is no engineering work to do one week, you probably can’t just send the engineer out to install PV systems or do sales calls. On top of that, it is expensive to buy errors and omissions insurance, which must be kept in force for years after project completion. Companies don’t realize how much it really costs to run a professional engineering team until they try it, and then the cost of outsourcing seems much more reasonable. By comparison, it is relatively easy to bring PV design services in-house. You can start with a position that splits PV design and sales responsibilities, and work up to a dedicated design team for PV projects that do not require professional engineering. As companies grow, it may eventually make sense to hire an engineer to direct that in-house design team.
SP: At what point in the project development cycle do you prefer to come on board?
MH: It’s best to contact an engineering firm early, ideally as soon as you determine that a project requires PE services. That way you can hand off the engineering scope of work and maximize the benefits of having an engineering team.
The worst time to bring an engineer on board is after the design package is complete. If you are a solar company, you don’t want a DIY customer that offers you $100 to make a utility interconnection. Why would you take responsibility for a system you didn’t install? That’s what it’s like when a solar company brings a completed design package to a PE and asks him or her to stamp that design.
SP: How do design service providers differ from engineering firms? What kind of work is best suited for these different entities?
MH: PV design companies are best at providing residential and small commercial design documents, based on the contractor’s input about what equipment to use and the physical project layout. You should work with PV design companies when you just want a design document to get a permit. If it’s less expensive than having an in-house design employee and you do not mind giving up most of the control of the design, it can be a beneficial arrangement. Keep in mind that unless a PV design company has a licensed engineer, architect or contractor on staff, it cannot offer or provide design documents stamped by a professional engineer in most states, including California.
When you work with an engineering firm, you are teaming with a licensed professional who can provide a wide range of engineering support services. If the project requires an engineering stamp to get a permit or if you feel uncomfortable about your ability to produce a safe and proper design, then you should hire an engineering firm. Typically, bringing in an engineering firm best fits in the budgets of projects above 500 kWdc or particularly complex projects above 100 kWdc.
SP: How do you and your customers approach value-engineering activities? Are there occasions when spending more money on engineering services can reduce costs elsewhere?
MH: First, let’s define value engineering. While many people think value engineering is simply about trimming a project down to meet a budget, project budgeting is its own process. Value engineering is the process of maximizing the ratio of function to cost, which we achieve by increasing functionality or decreasing costs. It’s hard to say beforehand if value-engineering activities will improve a design. But the more complex the project, the greater the likelihood that there are areas that can be improved. The key to value engineering is to employ people who are very experienced in the many ways to design a PV system and to refine designs. These people apply their experience and knowledge to a preliminary design to derive the most value from the project.