Author: Sarah Morton
There are different ways to choose a bulk-buy product, but it helps if you can give the responsibility to one person or a small group. They can then develop the product specification, liaise with suppliers, evaluate the product offers and select the best one.
1. Working with a supplier
A common approach is to appoint a supplier who's responsible for sourcing and delivering equipment. They may also be able to administer rebates and Renewable Energy Certificates (RECs). This article can help you choose a supplier for equipment only, or help you take on the role of choosing the equipment yourself.
The process of choosing the right bulk-buy product can be quite time consuming and technical. Anyone who gets involved at this stage should expect to dedicate a reasonable amount of time to the task, and it helps if they have relevant experience or a strong interest.
2. Establish your product needs and priorities first
Decide what products and services are important to your group. Ideally, to help you decide, you'll have surveyed prospective bulk-buy participants (refer to Setting up a bulk-buy program). Or, you may just rely on the experience or expertise of the organising group. Remember to capitalise on the experience of other bulk-buy groups.
Depending on your priorities, here's a list of things to consider and the type of information to look for:
- What are the cost of ‘standard offers’? How many participants does this depend on?
- What are the variations in cost for non-standard items? For example, the difference between tiled or flat roofs?
- Is the offer flexible? Can you upgrade capacity or equipment at a later date?
- What does the price include and exclude? Does it include site inspections? System design reports? Or a certificate of electrical safety?
- Why do prices vary? Is this explained clearly?
- Is the price fixed? If so, for what period of time?
- Does the equipment proposed include brands and warranties? Does it meet Australian standards? Which country is it manufactured in? What's the embodied energy or life-cycle analysis?
- Is there a warranty for workmanship?
- Is the installer fully certified and registered?
- Can the supplier carry out the installations and meet demand? What's their current workload? What additional resources do they have available?
- Is the company local? Will they guarantee a certain proportion of local workers, to include training or up-skilling as appropriate? (Building local capacity to support local jobs can have benefits for maintenance and service, and may be a secondary aim of your bulk-buy).
- Do you need to put down a deposit? If so, how much?
- How are RECs dealt with? Can customers forgo the sale of RECs if they wish?
- Is the sale of RECs included in the price?
- Will the supplier carry out any promotional activity? Or is that up to the bulk-buy group?
Once you've decided what information you need to make a decision, put together a list of these points. Be careful not to request information that's not particularly important. An excessively long list may overwhelm potential suppliers, and reduce the number of responses you get.
3. Produce a clear project specification
To help you decide which offer best meet your needs, you'll need a project specification document which suppliers can use to submit their quote. This will allow you to compare product offers accurately and fairly. This document should detail your information, product and service needs. It should:
- request all the information you need from the company (as discussed above)
- outline how involved you intend to get in the bulk-buy process (be specific about which roles would be the company’s responsibility and which would be yours)
- include any other information on your preferred bulk-buy design (as discussed in the article Setting up a bulk-buy program), including anticipated group size, time-line, whether benefits should flow to individuals through cheaper systems or the community as a whole (for example, through free installations on public buildings)
- include any other relevant information that will help companies understand your specific needs and provide accurate quotes. You might want to ask for quotes based on a range of different group sizes - maybe ones based on five, 10, 50 or even 100 installations.
This document will vary greatly between groups, from a short list of questions and instructions, to a more lengthy document. Use project specifications, submitted by other bulk-buy groups, as a guide.
4. Call for expressions of interest
Some groups call for expressions of interest (EOI) from suppliers by invitation only, while others advertise in newspapers. If you call for EOI by invitation, there are various ways to develop a list of suppliers - use the internet, other bulk-buy groups or word of mouth. Depending on the technology, there may be industry listings of installers, such as the Clean Energy Council’s list of accredited solar photo voltaic installers.
To help you decide how many companies to contact, bear in mind your response rate may be as low as 25%. The final response rate will depend on various factors, such as the amount of information you request and how busy the industry is at that point.
5. Appointing a supplier
It's wise to seek legal input when you're drawing up contracts with suppliers. This helps to give each party a clear understanding of roles and expectations, and provides some protection. It's also a good idea to reduce your risk exposure by doing due diligence. For more information, read our article on Managing risks of a bulk-buy program.