Shoreline Energy Advisors generally prices its services in one of four ways depending upon the nature of the project and the clients’ preferences:
A word on “Shared Savings” programs and Pricing Arrangements – Shoreline Energy Advisors does not work on a “shared savings” basis but we are very familiar with this type of arrangement which is very common in the educational sector. What we have found in working in an advisory capacity with our clients is that “shared savings“ tend to be very expensive and uncontrollable with tightly specified contractual terms and conditions from the vendor which can hamstring a school district, costing them much more than needed to achieve their objectives.
We have also found the level of technical knowledge and breadth of expertise in these arrangements to be lacking and heavily skewed to common sense efficiency and behavioral change measures. The standard requirements in “shared savings” to purchase proprietary hardware and / or software as part of the program, or to embed one of their employees in a district with wide latitude to make energy decisions, makes them unnecessarily complex and even less attractive.
Fixed Price - Pricing an engagement on a “fixed price per project” basis can be appropriate when the scope of work is recognized, agreed to, and well-articulated between client and consultant. The trick is to be able to define the work scope and schedule completely, to the satisfaction and comfort level of both client and consultant. In pricing our proposals under Fixed Pricing, we determine who would be needed on a project and for how long, and calculate their total cost based on their billing rate for their level of expertise. Any non-labor expenses or overheads are added in at appropriate levels, everything is summed and a fixed price is proposed. Generally, the larger the project, the higher the discount given to our standard hourly billing rates for labor so there can be economies of scale with this method.
Hourly Billing - Hourly billing is an option when:
We have found Time and Material can sometimes get expensive for our clients, particularly when the initial work assignment can be fluid with priorities that change rapidly.
Monthly Retainer - When the workload is dynamic and evolving, a monthly retainer for the resources of our firm has proven to be a good way of satisfying client needs for budgetary assurance and Shoreline’s need for consultant utilization certainty. Shoreline personnel essentially become an extension of client staff when using a monthly retainer.
Shoreline Energy Advisors is always confident in our work and we will not take on an assignment if we don’t think we can exceed client expectations. With a retainer, Shoreline allows its’ clients to terminate their contractual arrangements for any reason, at any time, with only one month’s notice so a clients’ exposure to long-term legacy commitments using a monthly retainer is limited.
Many of our larger clients favor the monthly retainer arrangement in that it provides them with the certainty of having qualified resources available to deal with energy questions and challenges that can arise in a dynamic environment.
Project Development Model – This method of pricing is generally reserved for the development of large-scale energy projects such as renewable energy, cogeneration, district energy, micro grids, etc. It is modeled after the real estate development process where a developer essentially covers only his costs of development without little or no markup, but receives a small share of ownership in the completed project where he will share in the future cash flow from the project. It is effective in aligning the interests of the majority owner with the developer because neither will dedicate their efforts or resources to the project unless it is initially viable and remains so throughout the development process. It should contain well defined milestones and off-ramps which are measured and evaluated before further resources continue to be dedicated to the projects development. A client acquires a high level of expertise in the development of their project and the arrangement should be structured so that the client has confidence that their consultant is a partner with common objectives and aligned goals, in contrast with a conventional fee professional, supplier or vendor.