One of the recurring themes we hear talking to international solar integrators in the U.S. and Canada is that it can cost up to a third more and take up to twice as long to install a facility in North America as it does in Germany.

One major cost and time barrier has been the legal process. I was delighted to hear that K&L Gates, a well-known international law firm that I have worked with in the past, has been diligently working on this challenge, and I talked to Dirk Michels of their Palo Alto office about their work in the U.S. and Canada. Dirk has more than 15 years of experience practicing law in Germany and California and, in March, he was honored as being among the top 25 clean technology lawyers in California by the Daily Journal, California’s largest legal publisher.

Where can thorny legal questions arise?
Issues can come up in all sectors, including residential, commercial, utility and transmission.

What has been your focus?
We’ve been partnering with SunEdison and Solar Power Partners on large-scale projects where the PPA (power purchase agreement) document can be unique to the project and 150-200 pages long. This leads to an exciting opportunity that has developed over the last few years. As a larger number of rooftop installations with smaller capacity—300-500KW and an investment of $1-2.5M—became more common, it was apparent that they could not stand the time and cost of negotiating a 200 page agreement. As a result, we developed a standard set of terms and conditions condensed into a 10-page document, reducing the cost to approximately $10K. We’ve been able to capitalize the initial cost over 40+ projects so it has been a win-win for operators and integrators.

What issues do you see moving from state to state and province to province? Are there major legal differences?
Yes, there are real differences. In California, rooftop installations are easy, but for example if you have a rooftop installation and supply electricity to the grid in Arizona, it is very easy to be classified as a utility—even if it is a 10 kW installation—which brings a great deal of onerous regulatory challenges to the roof owner. We pioneered a rooftop lease and a standard suite of agreements for SolarTec to facilitate installations in Arizona so the roof owner is selling a service at a fixed price and is not classified as a utility.

Looking towards the future?
The market is still very fragmented with no dominant players, even in California. Margins are being squeezed and financing has been difficult. We have been working with regional banks through a series of workshops to encourage them to finance projects and we have 10 projects under our belts thus far. We realize that success breeds comfort with further lending. In addition, we’re working on environmental and land use issues, which will become more interesting as the pace of installations accelerates.

For more information see www.klgates.com. The website contains useful links to news items (for example on changing regulations and tariffs) and upcoming events.

—Alan Rae

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