Solar EPC Contract Checklist: 12 Clauses to Check Before You Sign

Most solar disputes do not start on site. They start in the contract.

A vague scope, a missing guarantee or an unclear payment trigger looks harmless on signing day. Twelve months later, it becomes a delayed plant, a surprise invoice or a performance gap with nobody accountable.

A solar plant is a 25-year asset. The contract that creates it deserves a line-by-line read. This checklist covers the 12 clauses that matter most.

This blog is general guidance and not legal advice. Have your legal counsel review the final contract.

1. Scope of Work

The scope should name every item, not summarise it. Check that it covers:

• Site survey, soil testing and design

• Civil work, structures, modules, inverters, cables and transformers

• Evacuation line and grid connection work

• Approvals, testing and commissioning

• Monitoring system and handover documents

Anything not listed becomes an extra cost later. “Turnkey” on the cover page means nothing unless the scope backs it up.

2. Technical Specifications and Make List

The contract should state the make, model, rating and quantity of key equipment: modules, inverters, structures, cables and transformers.

Look for a clause that allows substitution only with written approval and equal or better specification. Without it, the equipment delivered can differ from the equipment quoted.

3. Price and What It Includes

Confirm whether the price is fixed or variable, and what it includes:

• GST and other taxes

• Freight and insurance

• Statutory fees and utility charges

• Escalation clauses for commodity or currency movement

A low headline price with open exclusions is rarely low.

4. Payment Milestones

Payments should follow verified progress, not calendar dates. A healthy structure links payments to milestones such as:

• Advance on signing

• Material delivery

• Installation completion

• Commissioning

• A retention amount held until performance is proven

Avoid contracts that front-load most of the payment before work reaches site.

5. Project Schedule and Delay Penalties

Check the completion date, the milestones leading to it, and what happens when they slip.

• Is there a liquidated damages (LD) clause for delay?

• Who bears delay caused by approvals, land or grid connectivity?

• Is the monsoon addressed in the schedule?

A schedule with no consequences is a wish list.

6. Performance Guarantee

This is the most important clause for long-term returns. It should state:

• Guaranteed Performance Ratio (PR) and/or minimum annual generation

• How and where it is measured, including the irradiance sensor and its calibration

• The test period and conditions

• The remedy if the plant falls short, for example compensation or corrective work

A guarantee with no measurement method and no remedy cannot be enforced.

7. Warranties

Separate the warranties and read the terms of each:

• Modules: Product warranty and performance warranty, including annual degradation

• Inverters: Warranty period and extension options

• Structures: Corrosion and structural warranty

• Workmanship: Period covering installation defects

Check who handles a warranty claim: the EPC, or the manufacturer directly.

8. Testing, Commissioning and Acceptance

The contract should define what “commissioned” means. Look for:

• Pre-commissioning tests such as insulation, earthing and string testing

• Statutory inspection and grid synchronisation

• A performance test before final acceptance

• A written handover with as-built drawings and documents

Do not accept a vague “completed to satisfaction” clause.

9. Approvals and Responsibilities

List who is responsible for each permission, application and statutory clearance: yours or the EPC’s. Unclear ownership here is a common source of delay and finger-pointing.

10. Operations and Maintenance (O&M)

If O&M is bundled, check:

• Cleaning frequency and method

• Response time for faults

• Spares availability

• Monthly reporting format

• Contract duration and renewal terms

If O&M is separate, confirm the EPC will hand over everything the O&M team needs.

11. Liability, Insurance and Safety

• Insurance during construction, transport and storage

• Who bears risk until handover

• Cap on liability and what it excludes

• Safety standards and site compliance

12. Termination, Variation and Disputes

• Conditions under which either side can terminate

• How scope changes are priced and approved in writing

• The dispute resolution process: negotiation, arbitration and jurisdiction

A change that is not approved in writing is a dispute waiting to happen.

Red Flags in an EPC Proposal

• A price far below every other quote, with no explanation

• No named equipment makes

• No performance guarantee, or one without a remedy

• Payment mostly upfront

• Reluctance to show completed projects or client references

Final Thoughts

A good EPC contract protects both sides. It sets out what will be built, how it will be tested, what happens when something goes wrong, and who answers for it.

Read it as if the plant is already built and something has gone wrong. If the contract answers every question, it is ready to sign.

Reviewing an EPC Proposal?

Send us any quote or contract draft. GRPP will walk through scope, guarantees and payment terms with you.

Green Revolution Powerpark LLP
info@greenrevolutionpowerpark.com
www.greenrevolutionpowerpark.com