Will EPC contracts provide for the handover of a solar facility?

EPC Contracts will not provide for the handover of the solar facility to the Project Company, and the PPA will not become effective until all commissioning and reliability trialling has been successfully completed.

Should you choose an EPC contract for a solar project?

Given the significant monetary value of EPC Contracts, and the potential adverse consequences if problems occur during construction, the lowest price should not be the only factor used when selecting a Contractor. As noted earlier, an EPC Contract is one of a suite of agreements necessary to develop a solar project.

What is an EPC contract?

An EPC Contract delivers these requirements in a single integrated package, which is one of the major reasons why EPC Contracts are the most common form of construction contract used in project-financed utility-scale solar projects. The key clauses in any construction contract are those that impact on time, cost and quality.

What is a bankable EPC contract?

A bankable EPC Contract is a contract with a risk allocation between the Contractor and the Project Company to the satisfaction of Lenders and their credit committees.

What is an EPC project?

EPC projects that are also known as ‘turnkey’ and as the contractor assumes responsibility for engineering services, procurement of materials, hiring of teams and materials, and execution of the work, among other tasks, to deliver the project ready to be operated by the client by a given deadline and with a number of guarantees.

Do EPC contracts impose PLDs?

Most, however, do not impose PLDs. EPC Contracts impose PLDs because the achievement of the performance guarantees has a significant impact on the ultimate success of a project. Similarly, it is important the solar facility commences operation on time given the liability the Project Company will have under other project agreements.