Reinventing solar module, storage procurement with Anza | The Pitch

The Pitch Anza featured screen

Solar procurement for large-scale solar projects is complex. For developers, IPPs, and EPCs looking to work more efficiently, Anza offers buyers a way to instantly compare and rank equipment based on customizable filters to best fit each project, all of which is backed by decades of solar procurement experience.

For those who don’t know, Anza is the online procurement platform built by Borrego (previously one of the largest EPCs and developers in the U.S.). They are constantly adding new features and analytics — the most recent updates in the advanced view includes a product risk assessment, taking into account trade and supply chain risks (like UFLPA and AD/CVD) as well as product risk factors (like hail damage rating).

Anza is an incredibly robust tool, and on a recent episode of The Pitch, CEO Mike Hall gave us a quick demo of how it works, and explained how dramatically saves time and money in large-scale solar development.

Hall: We launched Anza because we saw that in our own EPC business, and also in our own development business, that there were tremendous inefficiencies in how procurement was being done, and really the industry wasn’t utilizing what we can do with data and modern technology. Then layer on top of that, we have all sorts of new risk issues like trade from UFLPA [Uyghur Forced Labor Protection Act] and AD/CVD [tariffs].

Crowell: I have to know before we dig into it, why you didn’t just keep it to yourself? You kind of built a pretty awesome, powerful tool here. So, why not just keep it with Borrego?

Hall: We did. We used these tools. The general algorithms all came from Borrego, and they were a big part of our secret sauce, not just as an EPC but in our development business as well. We started to track how much additional profit we are generating by using these procurement optimization algorithms, and it got into the tens of millions.

“The reason we decided not to just keep it to ourselves is, you know, for 20 years we were in the business of making money through doing projects. And that was great, but that’s not really my mission, that’s not really the mission of the people who co-founded Anza with me, or the people who work at Anza. We’re really trying to accelerate the adoption of renewable energy. The industry was really inefficient, and the ability for buyers to get the data they needed was limited. Companies are having to waste a tremendous amount of their valuable people time to do it.”

Watch the demo:

Key points in demo (for solar modules only, we do not cover ESS procurement):

Enter all of project information (location, module delivery date, project start date, whether it’s fixed tilt or tracker, and project size. “A 25 MW project is a pretty typical project size for us. We work with customers who are doing projects down into the small single digit MWs up to 500 MW.”

Anza then calculates a table of data for all of the module options that fit the criteria from 35 module suppliers. The tool allows the buyer to sort and filter by price, BOS savings, cell technology, domestic content, Watt class, and on and on. But the ranking is set in an order based on Anza’s Effective Dollars Per Watt calculation.

Anza table of data

“We’re actually taking into account differences in expected installation costs, and differences is in energy production, and the value of that production over the life of the project. [Effective Dollars per Watt], we think is the best way to look at total financial value.”

Each product has a page with much more data, including PAN files from both the manufacturer and Anza.  “We know that buyers will spend a whole lot of time chasing down this data [on their own.”

Subscribers have the ability to dial in the financial analysis much further, including the PPA rate or the average revenue per kWh for the project, escalation rate, and much more.

The new Advanced View has fields related supply chain, such as UFLPA and AD/CVD risk. “We’ve built an objective risk matrix that we share with our customers to rank vendors in the what we consider lowest, medium or high categories for UFLPA risk, and same with AD/CVD. We’re also tracking significant data about those vendor supply chain. For example, are they committed to using all non-China polysilicon in the US market? Have they provided us with a traceability audit?”

What happens after I select my module? Hall: “We sign a contract with the buyer, and the buyer pays us for access to the data and technology and also the services that we wrap the whole thing in. We have a big advantage in that we have template master supply agreements with all 35 vendors. We can use those as a starting point, but we can also guide our customers toward what’s in market, leading market, lagging market on every major contract term. We will really get into it and participate as much as our customers want in the contracting process.

Why project by project purchases vs. large master supply agreement?

Hall: “The logic in the thinking is it’s easier to do one deal than a bunch of smaller deals. There’s also the belief the economies of scale of a big procurement is the best way to get a good deal. And we’re, in almost every case, advising buyers to rethink that practice.”

Summary of Hall’s reasons why:

1. Less advantage the higher the MW. There is an economies of scale price advantage when you’re going from like a few MWs up to ~100 MW, but “once you get past 100, there’s actually not a great correlation between the volume of the order and price. Other things become much more important, and so buyers aren’t necessarily getting that economies of scale that they think they are.”

2. Timing. When you’re buying for multiple projects way in advance, it is difficult to line up “the timing of delivery, and the timing of those orders in a big master supply contract, with when the projects will actually need the product. Buyers are having to either take inventory or renegotiate with their vendors because projects get delayed, and that is really expensive.”

3. Projects are different. “The optimal module for one project is not necessarily the optimal module for another project. That could have to do with some of the things we talked about in the demo. For example: different PPA rates. If one project is a higher PPA rate, that actually might drive you to spend more for a more efficient module.”

Explanation of Effective Dollars Per Watt calculation

A lot of work went into both the production node and the balance of system calculations. “On the production node, we’ve done a lot of calibration to make sure that it’s very close to the results you would get from PVsyst. But our tool obviously has the ability to do the calculations much faster – you saw we’re doing the calculations for 61 modules in a matter of seconds.

“We’re also doing a lot of diligence on the PAN files that are being delivered to us from the manufacturers to make sure that the results that we get are going to be very similar to what you should expect your third-party engineer to deliver.

“On the balance of system side, a lot of the calculations originally came from our cost estimating tools and cost data that we had in our EPC business, so it’s not theoretical; it’s a real practical model. We’ll break that down, and we’ll actually show you the unit costs, and quantities, and how it is that we’re arriving at these differences.”

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