Guide
10 red flags in a solar EPC contract
The clauses that quietly leave you with no recourse.
Most owners sign the EPC’s standard contract with light edits. But the contract is where your protection lives — or doesn’t. These are the ten clauses we flag most often when reviewing EPC agreements for clients.
01
The ten to check
Read every one of these against your draft. If any is missing or vague, that is where a dispute will eventually land.
- Liquidated damages for delay — capped too low or absent
- Performance Ratio guarantee with NO defined IEC 61724 methodology
- No retention (5–10% until Final Acceptance Certificate)
- No performance bank guarantee from the EPC
- A vague BOQ with “or equivalent” on modules and inverters
- Defect liability period under 12–24 months
- Payment milestones front-loaded ahead of actual progress
- Warranties that don’t flow through to you in writing
- No clear scope boundary (evacuation, land, statutory costs)
- Weak or one-sided termination and dispute-resolution clauses
Frequently Asked Questions
The Performance Ratio guarantee. When the contract doesn’t define the PR calculation, temperature correction and test window per IEC 61724, the EPC and owner end up in a dispute at the worst possible moment — at handover.
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