Project development procurement used to be about finding the right equipment at the right price. Today, it’s more like solving a Rubik’s Cube. Every move affects financing, project viability, tariff costs, domestic content compliance, project schedules, and long-term risk. To be successful, it now requires deep experience, foresight, and a clear understanding of how all the pieces fit together.
Foreign entity of concern (FEOC) requirements, tariffs, and domestic content incentives have dramatically reshaped clean energy procurement over the last 12 to 18 months. Procurement teams for engineering, procurement, and construction (EPC) companies need to find a delicate balance of:
The challenge is that, much like a Rubik’s Cube, decisions in one area often affect every other area.
When equipment availability becomes the schedule
Lead times have always mattered, but today’s market conditions have made them far more consequential. For example, during the development of a recent project, the team at TruGrid procured quotes for a 100 MW / 200 MWh battery energy storage system (BESS) project. Domestic equipment options carried lead times of about 64 weeks, but comparable solutions sourced from China were available in roughly 32 weeks.
Some of the greatest schedule risks stem from equipment that rarely gets attention during early project planning. Transformers, high-voltage switchgear, and breakers that once carried lead times of around 46 to 52 weeks can now stretch to 120 to 135 weeks.
The result is that procurement decisions are increasingly becoming scheduling decisions. Developers need visibility into market conditions early in the process in order to evaluate sourcing options and identify potential bottlenecks before they impact project timelines.
Thankfully, domestic content manufacturing will soon become much more readily available. Data from the American Clean Power Association shows a steady increase in manufacturing facilities that are being built and coming online in the next few years.
Domestic content capacity of various components is expected to grow to meet and exceed demand by 2028. Source: American Clean Power Association
Production capacity is expected to exponentially grow for the primary components of both solar and BESS. By 2028, there will be more than 80 GW of capacity for solar modules and about 30 GW for solar cells. When it comes to batteries for that time frame, there are expected to be about 170 GWh of modules and 130 GWh of cells.
The true cost of equipment decisions
Cost remains important, but the conversation now goes beyond equipment pricing. Tariffs, domestic content requirements, and supply constraints all influence project economics. This means EPC procurement teams are increasingly evaluating the total impact of sourcing decisions, including price, schedule implications, tariff exposure, domestic content considerations, and long-term project risk.
Display of how domestic and imported content have tradeoffs that impact project success.
For example, an imported solution may offer a lower purchase price while introducing additional compliance requirements. Alternatively, a domestic solution may support project incentives or financing goals, but it will likely carry a higher upfront cost and schedule risk.
In many cases, the financial impact of a delayed project exceeds the cost difference between competing equipment options. Understanding those tradeoffs early helps developers make more informed decisions.
Procurement has become a financing decision
Perhaps the biggest shift is procurement’s growing influence on a project’s financial decisions. Lenders and investors are paying closer attention to equipment sourcing strategies, supplier qualifications, and compliance documentation. Today’s procurement teams need to routinely evaluate factors that directly impact a project’s bankability, including:
This level of due diligence helps reduce uncertainty and provides greater confidence to developers, lenders, and investors.
What project developers should do now
The pace of change is unlikely to slow anytime soon, thanks to evolving tariffs, domestic content capacity expanding, and continuous regulatory changes. For developers, these best practices are becoming increasingly important:
Just like our earlier Rubik’s Cube analogy, procurement isn’t solved one move at a time. Every sourcing decision changes the next set of options. Developers who understand those interconnected tradeoffs and plan ahead will be best positioned to reduce risk, protect project schedules, and improve overall bankability.
About the author
TJ Smith serves as Vice President of Procurement at TruGrid and has more than 30 years of experience leading procurement and supply chain operations for large-scale infrastructure and clean energy projects. He oversees sourcing, supplier management, and contract strategy for utility-scale battery energy storage and solar projects, helping deliver cost-effective, bankable projects while navigating complex market conditions.
The views and opinions expressed in this article are the author’s own, and do not necessarily reflect those held by pv magazine.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: [email protected].
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