Solar energy storage general contracting contract

What is an EPC agreement for a battery energy storage system?

The negotiation of an engineering, procurement and construction (EPC) agreement for a battery energy storage systems (BESS) project typically surfaces many of the same contractual risk allocation issues that one encounters in the negotiation of an EPC agreement for a solar or wind project.

How do energy storage contracts work?

For standalone energy storage contracts, these are typically structured with a fixed monthly capacity payment plus some variable cost per megawatt hour (MWh) of throughput. For a combined renewables-plus-storage project, it may be structured with an energy-only price in lieu of a fixed monthly capacity payment.

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.

How much liability does a solar contractor have?

Therefore, EPC Contracts for utility-scale solar projects cap the Contractor’s liability at a percentage of the contract price. This varies from project to project; however, an overall liability cap of 100% of the contract price is common. In addition, there are normally sub-caps on the Contractor’s liquidated damages liability.

Will EPC contracts provide for the handover of a solar facility?

EPC Contracts will not provide for the handover of the solar facility to the Project Company, and the PPA will not become effective until all commissioning and reliability trialling has been successfully completed.

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.