New solar container development report summary epc

Do solar projects need an EPC contract?

In our experience, most utility-scale solar projects use an EPC Contract. An operation and maintenance agreement: This is usually a medium- to long-term Operating and Maintenance Agreement (O&M Agreement) with an Operator. The term of the O&M Agreement will vary from project to project.

What is an EPC contract?

The Project Company needs only to turn a key to start operating the facility, hence EPC Contracts are sometimes called ‘turnkey’ construction contracts. The Contractor must deliver the complete facility for a guaranteed price by a guaranteed date and the facility must perform to the specified level.

Is a contract price a factor in the bankability of a solar project?

Price is also a consideration but is usually considered separately from the bankability of the contract because the contract price (or more accurately the capital cost of the solar facility) relates to the bankability of the project as a whole.

What happens if a contractor fails to comply with EPC requirements?

Failure to comply with any requirements will usually result in the Contractor incurring monetary liabilities. EPC Contracts and their use on solar projects has recently attracted negative publicity, particularly in contracting circles.

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.

Do EPC contracts eliminate or mitigate risks?

EPC Contracts do not eliminate or mitigate against all risks; however, when drafted correctly they can ensure performance, timely delivery and rectification within agreed parameters or up to agreed caps. For this reason, we recommend advice on a project-by-project, contract-by-contract basis.