Solar EPC Contract Checklist
10 Critical Clauses (2026)
Every B2B solar buyer should pressure-test their EPC contract against these 10 clauses. Each section flags a common risk + the protective contract language. Written by a manufacturer who has seen hundreds of EPC contracts — for buyers, not contractors.
Scope of Work (SOW) Clarity
Ambiguous SOW = variation order disputes mid-project. EPCs exploit vague scope to bill extras.
- Single-line diagram (SLD) attached and referenced
- Bill of quantities (BOQ) itemized with manufacturer + model per line
- Clear boundary: where EPC scope ends (DC side / AC metering / grid connection)
- Explicit exclusions list (permits? utility upgrades? transformers?)
- Change order procedure with pre-agreed unit rates
Performance Guarantees & PR (Performance Ratio)
EPCs often guarantee annual energy only — hiding underperforming modules behind string aggregation.
- PR guarantee ≥ 82% (ground-mount) or ≥ 80% (rooftop) in Year 1
- Measurement methodology: IEC 61724 standard, independent verification
- Guarantee period: minimum 5 years post-COD (commercial operation date)
- Liquidated damages formula per % PR shortfall (e.g., $X/1% shortfall)
- Weather normalization via on-site pyranometer + typical meteorological year (TMY)
Delay LDs & Bonus
Every week of delay past COD = lost revenue never recovered. Weak LDs let EPCs slip.
- LD rate: 0.1-0.2% of contract value per day of delay (accumulating)
- LD cap: typically 10-15% of contract value (higher cap = stronger incentive)
- Mutual bonus clause: EPC earns 50% of LD rate for early completion (aligns incentives)
- Force majeure definition: realistic but not loose (exclude typical weather)
- Monthly progress milestones with hold-back on payment if milestone missed
Module Manufacturer Warranty Backstop
If EPC goes bankrupt, module warranty claim goes to manufacturer direct. No transfer = no coverage.
- Module manufacturer warranty assignable to end owner (not just EPC)
- 25-year product + 30-year linear performance warranty passed through
- Warranty activation date: date of B/L or commissioning (lock in writing)
- Claims procedure documented: contact person, response SLA, replacement logistics
- End owner listed as beneficiary on warranty certificate
Payment Milestone Structure
Front-loaded payments leave buyer exposed if EPC fails to deliver or quality issues arise.
- Mobilization: 10-15% (not 30%+)
- Against material delivery: 40-50% (only on site + SGS inspection)
- Mechanical completion: 20-25%
- PAC (Provisional Acceptance): 10-15%
- FAC (Final Acceptance, after PR test): 5-10% retention 12-24 months
- Performance bond: 10% contract value, valid through warranty period
Quality Assurance & Testing
EPCs cut corners on testing when rushed. You find out Year 3 when strings underperform.
- Pre-shipment EL testing: 100% of modules (not sample)
- Flash test reports: per pallet / per container
- Third-party inspection: SGS, TUV, or BV before shipment
- Site testing: megger test, string I-V curves, infrared scan before PAC
- Commissioning protocol: documented test sequence signed by both parties
Insurance & Liability
Construction accident, fire, module defect — someone pays; make sure it's not you.
- CAR (Construction All Risks) insurance: contract value + 20%
- Public liability: minimum $5M USD
- Professional indemnity: for design errors
- Workers' compensation as per local law
- Environmental liability rider if site has chemical contamination risk
O&M Handover & Spare Parts
Year 1 warranty expires, then nobody knows how to maintain the plant. Spare parts discontinued.
- O&M manual in local language (not just English)
- Training of owner's staff: minimum 40 hours hands-on
- Spare parts list: module, inverter, combiner, monitoring — 10-year commitment
- First-year O&M included in EPC scope (warranty period)
- Transition to separate O&M contractor planned (if desired)
Dispute Resolution & Jurisdiction
Sue an EPC in their home court with their lawyer? You'll lose. Pick neutral forum.
- Arbitration clause: ICC, SIAC, LCIA (neutral), in English
- Seat of arbitration: Singapore, London, Geneva (well-regarded)
- Mediation step before arbitration (often resolves cheaper/faster)
- Governing law: English law, Swiss law, NY law common
- No class action waiver if end users could aggregate claims
Termination Rights
EPC in financial distress, or fundamentally under-delivering. Weak termination = project stuck.
- Termination for cause: material breach + 30-day cure period
- Termination for convenience: pre-agreed compensation schedule
- Step-in rights for lender (if project-financed)
- EPC insolvency: immediate termination trigger
- Post-termination: how is partial work valued, how are specials handled
EPC Contract FAQ
Does JUSTSOLAR do EPC contracts or just supply modules?▼
JUSTSOLAR is primarily a module manufacturer. We supply modules (+optionally inverters, mounting, batteries) to EPCs. We do NOT act as EPC on third-party projects (except by special arrangement in certain regions). This contract checklist is for you to use when negotiating with your EPC contractor — as a buyer's protection guide.
Is the 25-year module warranty assignable to the end owner?▼
Yes. JUSTSOLAR's warranty is structured to transfer freely through the supply chain: from JUSTSOLAR → to EPC → to end owner. As long as there's a documented chain (B/L, invoice, commissioning certificate), the warranty follows the physical asset. We prefer issuing the warranty certificate directly in the end owner's name when the EPC provides owner details at time of order.
What's the biggest EPC contract red flag?▼
An EPC unwilling to accept a reasonable PR guarantee (~82% ground-mount, ~80% rooftop) with liquidated damages. It signals either (a) they don't trust their own design, (b) they want to cut equipment quality to boost margin, or (c) they lack technical capability to meet basic standards. If EPC refuses — walk away or require significant equipment upgrade + third-party design review.
Should the buyer hire a separate owner's engineer?▼
For projects above 1 MW: yes, almost always. Owner's engineer (OE) costs 0.5-1.5% of CAPEX and catches design errors, inflated BOQs, and construction quality issues that can save 5-10% of CAPEX or prevent long-term performance loss worth 10-30x OE fees. For rooftop C&I under 500 kWp, an OE is optional but consider at least a pre-commissioning review by independent consultant.
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