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7 Hidden Costs of Choosing the Wrong Project Site

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Nothing is more frustrating than spending time, money, and resources finding a site for your next development project, only to discover down the road that it just won’t work.

Okay, maybe having the same barista call you Kevin for the 47th time when you’ve told him your name is Devin is a close second. (No wonder Kevins keep taking your flat white.) But still! It’s really annoying!

Unfortunately, being ticked is far from the only not-so-hidden cost of accidentally choosing the wrong project site. Wind farms, solar arrays, power plants, real estate projects … these are big ol’ projects, and simply identifying the right land for them can be a full-time job. In fact, environmental consultants make it a full-time job, and not in a good way. More on them later.

Point is, if you don’t have a suitable method for finding great sites upfront as part of your project planning process, your bottom line is going to suffer in several ways. Here’s an incomplete but still depressing list of seven. But don’t worry; we’ll help you find your way out of the weeds too.

Read on.

1. Analyzing Dozens of Sites in Hopes of Finding Just One

 

Did you know that of all the sites initially identified as suitable for development, only 10 percent of them are high quality enough to actually make it to the finish line? That’s right … whether we’re talking about solar, wind, or other types of utility, literally one out of ten has a chance of seeing the light of day.

And that’s not just a sun pun. We’ve discussed the Land Grab of 2022 before, and it’s a real concern. More and more site hunters are out there identifying possible parcels but not doing enough work to ensure that they’ll actually fit the bill. While you’re trying to catch up, you’re losing money, losing buy-in from your backers, and losing the ability to get the job done.

Um, no, thank you to the 10 percent pickle.

2. Delayed Project Timelines

Oh, did we mention the incredibly stretched times for finding out whether you’ll even be able to break ground on a project, let alone finish it? We didn’t? Well, it’s a thing.

Any development company can attest that they spend nearly as much time cooling their heels, waiting for permits to come through, as they do actually building. This time waiting is part of the actual cost of the project. It’s frustrating as hell, especially without a flat white to keep you company.

Kidding. Kind of. But this is another genuine concern that is holding up the project management process, meaning we have a genuine chance of failing to meet the energy demands of Americans in the coming years. The opportunity cost is massive.  

3. That ONE Thing You Didn’t Account for Upfront

You know what’s super-duper, extra fun? Going through the long, exhausting decision-making process of finding a site, only to learn belatedly that your site:

  1. Is home to A Very Endangered But Little Known Tennessee Mammal of Concern
  2. Sits smack dab in the middle of a wildlife corridor
  3. Occupies a Brownfield site
  4. Is a Native American burial ground, meaning you’d be a real schmuck to throw up an array there even if it were legal (spoiler alert: it’s not)

It’s truly grim how often this happens when it could have been avoided upfront with better intelligence and more streamlined processes.

4. Fees to Environmental Consultants

Promised you we’d get to these guys, and here we are. In a nutshell, environmental consultants make a mint off of the misery of developers. They have traditionally been the gatekeepers of the permitting process, the only ones with access to regulations, site reports, state laws, and more. We’ve spent decades paying them to do the due diligence on a potential site, waiting months and paying thousands (and thousands … and thousands …) waiting to find out if that site has any hope at all.

We don’t love it. In fact, in light of the climate crisis and our desperate need for clean energy, we find this behavior nothing short of aggro. Even worse than when your own mother misspells your name. The problem is, with consultants being paid hourly, there is an incentive for them to make you wait.

The depressing fact is that you can’t know ahead of time whether a project site will work, which was the initial motivation for allowing environmental consultants to take the reins. They were supposed to expedite the risk-management process, but that’s not happening today. Giving your money to people who sit on that information for weeks or months doesn’t help. And more often than not, the answer they deliver is a flat no.

It's. So. Annoying.

5. Inefficient Development

The thing is, your personal annoyance isn’t that big of a deal. You could, like, do some yoga to deal with that.

Of much greater concern are all the people who are also inconvenienced. We’re talking about engineers, contractors, federal and state officials, laborers, venture capitalists, landowners, and everyone else involved in project development. All of these people just sit around, waiting on an answer that doesn’t come from those consultants, An answer that won’t result in a green light more often than not.

It's one of the reasons that siting Greenfield Land, which ought to be an excellent source of sites, is way more time-consuming than it ought to be.

Inefficient development requires you to upend your workflow:

  • Material Costs: Store materials for long periods when you don’t have the means to do so, inflating construction costs
  • Labor Costs: Keep workers and subcontractors on the hook and hope you don’t lose team members to other companies, an incredibly tiresome task when there’s a severe labor shortage
  • Re-up permits that have expired

… and more.

6. Cost Overrun

All of the above factors lead to – you guessed it – a bunch of money down the drain. You either pay for storing materials or sell them at a loss. Either you pay to keep workers around, or you have to onboard new workers later. Either you reapply for permits and spend beaucoup bucks doing so, or you … well, don’t have permits. Estimated costs balloon quickly. 

And that’s not going to work.

Sometimes this state of affairs is just obnoxious. Unexpected costs lead to fussy stakeholders or a bad quarterly report. Other times? Extra costs can really and truly bankrupt a project, leaving you high and dry and if you’re like us, spitting mad.

7. Unmet Energy Transition Goals

This one isn’t so much your goal as it is a goal of everyone. And Mother Earth’s. Maybe you’ve heard of her?

If we don’t get a jump on implementing green energy, we’re going to be holding the bag in just a few decades when climate change starts to wreak havoc on us all. Not only will we see increased extreme weather, crop failure, drought, species die-off, and any number of Hugely Not Cheerful other things, climate change will make permitting even harder.

That, in turn, will slow down our energy transition goals even more. Many predictions show us failing to meet the energy goals forecast for 2050, which we just can’t afford.

There Is an Answer

Before you try to drown yourself in the shower, let us just say: there is an answer. It’s not even that shocking. The secret ingredient to getting good projects off the ground, streamlining site selection, and meeting those critical energy goals? Better upfront identification and risk analysis of potential development sites, so additional costs do not hamper your total cost in your project budget.

Luckily, Transect is here to help you jump the line, skip environmental consultants, and find what you need for project success. Our vast array of due diligence tools find you better sites faster, with a much higher chance of getting funded and built. It’s a win-win-win-win … win. For all of us.

Want to learn more? Get in touch or schedule a demo any time.

 

Hidden Costs Infographic

 

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