In-House versus Outsourced Engineering Services: Page 4 of 7

Danny Lee

Senior Vice President, Engineering
Blue Oak Energy

Blue Oak Energy ( started as a PV system design company and evolved to become a professional engineering firm to meet the needs of large commercial, industrial and utility-scale projects. Based in Davis, California, the company currently has a team of 25 engineers and designers with in-house civil, electrical and structural professional engineers licensed in 26 states. The company typically helps deliver 350 MW–400 MW per year across 50–70 distinct clients.

SP: What types of solar engineering services does Blue Oak Energy provide in-house?

DL: We provide a broad range of services to support clients from development through permitting, construction and start-up.

At the development stage, we provide preliminary engineering for site selection and optimization. We specialize in civil assessments to address land development challenges and project constructability. This naturally leads to engineering support for environmental impact assessments, discretionary permits and other early-stage agency reviews. At the nondiscretionary permit stage, our engineering team delivers full permit packages. On the civil side, our team provides all site improvement plans, which may include hydrology studies, cut-and-fill plans, erosion and SWPP [storm-water pollution prevention] plans, and all the ancillary civil sheets, reports and exhibits. On the electrical side, we generate electrical site plans, wire and conduit schedules, construction details and all the supplementary studies. We also help our clients through the permitting process. At the construction stage, our team performs a variety of services including submittal review, responding to requests for information and in some cases on-site verification. Finally, we support the client in completing as-built or record drawings.

We see that land development and civil engineering have tremendous bearing on project success and timelines. In fact, civil engineering for off-site improvements could be more involved than the scope of work within the fence. Similarly, medium-voltage feeder, collection system and interconnection design have equal weight in the overall engineering scope of work. Further, industrial and utility-scale projects require coordination between a broad range of project stakeholders: developers, owners, construction managers, equipment vendors, plan checkers, the utility companies and other consultants. Blue Oak Energy is often contracted to be the engineer of record, the overarching firm that ties all the pieces together for the customer.

SP: What kinds of companies come to Blue Oak Energy for solar engineering services?

DL: Our client base includes developers, asset owners, equipment manufacturers, public agencies, construction firms and even other engineering firms. The two main categories of solar companies we do work for are solar developers and solar construction firms. The developers may be pure-play developers or independent power producers. For this group, we mainly provide development support on any engineering scope they do not have in-house; this is by and large civil land development, civil engineering, single lines and energy modeling. Solar construction firms typically have some engineering capabilities in-house but look to us for overflow or region-specific work. The construction firms typically have very specific requirements; they may have a preliminary design completed, all procurement worked out and detailed specifications down to drawing format. We provide them with site-specific engineering and calculations, as well as permitting and construction support.

SP: In what ways does Blue Oak Energy add value for its solar company clients?

DL: The value proposition for using a third-party provider is to stay lean on cash flow by paying for engineering only when you actually need it. Based on a couple recent conversations, the main reasons solar companies outsource engineering services to us is to smooth the peaks and valleys associated with getting a notice to proceed. It can take months, or even years, to officially kick off a project, whether the delay comes from getting a PPA inked or completing a utility-mandated supplemental review. An idle engineering team on your payroll that’s not billable will simply burn through cash. By outsourcing, you pay based on the work product rather than based on head count, as measured in salary plus benefits. Solar companies can also break the scope of work into smaller parts. We are often released to generate 30% design packages or bid sets to help finalize construction costs. We put our pencils down while the developer or owner figures out its procurement and execution plan, at which point we get a secondary NTP [notice to proceed] to generate permit documents.

SP: What advice do you have for solar companies that are weighing the pros and cons of offering engineering services in-house?

DL: In-house engineering capabilities are a good way for companies that primarily work on residential through medium-size commercial projects to coordinate the design work with sales, procurement, construction, and operations and maintenance. On projects of this scale, outsourcing the engineering can take more effort than simply doing the work in-house, especially if all the projects are within the same state or region. A lead engineer and several designers can support a good volume of work. The same team can support sales and do the detailed design.

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