Following is a summary of our White Paper "Appropriate NAICS codes for Renewable Energy Power Generation." Please download the full paper to the right.

Background:  The newly published 2012 NAICS includes new codes (221114-221117) for renewable energy with 221114 designated for solar electric power generation.  Concurrently with the publication of the new NAICS codes, code 221119 was eliminated from the NAICS list. 

Issue:  While either code 237210 (power and communication line and related structures construction) or 221114 (solar electric power generation) is an appropriate choice for solar electric systems, the SBA has not yet set a size standard for 221114.  Unofficial word within the contractor community is that DoD intends to move forward using 221119 for these procurements even though it has been eliminated from the 2012 NAICS. 

Recommendations:  We recommend that the DoD select NAICS code 237130 for its upcoming solar electric power purchase solicitations.  This will appropriately differentiate between large and small businesses and provide competitive opportunities for both.

• 237130 should be used until an interim size standard is set for 221114:  Renewable energy systems and Power Purchase Agreements (PPAs) can be procured under the Power and Communication Line and Related Structures Construction code 237130 with a size standard of $33.5M.
• SBA should set an interim size standard for 221114 of $33.5M in revenue:  The SBA should immediately establish an interim size standard for the new renewable energy codes 221114, 221115, 221116, and 221117 of $33.5M in revenue.

Urgency of the issue:  The Department of Defense will begin the first wave of its $4 billion in renewable energy purchases during the spring of 2012, including such key procurements as W912DY-11-R-0036 -- Renewable and Alternative Energy Power Production for Army Installations.  Immediate action is needed to choose appropriate NAICS codes for these solicitations that will avoid protests and delays.

Consequences of no action:  Any attempted use of 221119 would violate FAR Part 19.201, which provides that “the effective date of the Department of Commerce [NAICS] determination shall be no less than 60 days after its publication date.”  Continuing to use 221119 would inappropriately classify large businesses as small.  In addition, its footnoted requirement that a company be “primarily engaged in the generation, transmission, and/or distribution of electric energy for sale ...” would eliminate almost all solar companies from these competitions and would create multiple protests on every award.