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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 happens if the EPC contract is uncertain?

Any uncertainty in the EPC Contract may unfortunately see the Contractor liaising directly with these third parties and possibly risking the relationship of the Project Company with key influencers, customers and long-term neighbours.

What are the disadvantages of an EPC contract?

Another major disadvantage of an EPC Contract becomes evident when problems occur during construction. In return for a guaranteed price and a guaranteed completion date, the Project Company cedes most of the day-to-day control over the construction.

Who is the appropriate party in an EPC contract?

At a fundamental level, it is imperative that the appropriate party corresponds with the relevant project stakeholders. The Project Company must ensure the EPC Contract states clearly that it is the appropriate party to correspond with any government agencies or authorities and the offtaker.

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.

What is a performance specification in an EPC contract?

Performance specification: Unlike a traditional construction contract, an EPC Contract usually contains a performance specification. The performance specification details the performance criteria that the Contractor must meet. However, it does not dictate how they must be met. This is left to the Contractor to determine.

EPC contracts in the solar sector

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

Solar Photovoltaic System Cost Benchmarks

Figure 4 illustrates this year’s benchmark LCOE values for both PV and PV+ESS. For comparison, the corresponding LCOE value for each type of system in and are shown.

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Detail

The exact lifetime of the ESS is difficult to predict because it depends on the cumulative effect of multiple factors such as the number of cycles per year or day, average state of charge (SOC),