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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.

Should you choose an EPC contract for a solar project?

Given the significant monetary value of EPC Contracts, and the potential adverse consequences if problems occur during construction, the lowest price should not be the only factor used when selecting a Contractor. As noted earlier, an EPC Contract is one of a suite of agreements necessary to develop a solar project.

What are the benefits of an EPC contract?

As noted previously, one of the advantages of an EPC Contract is that it provides the Project Company with a fixed completion date. If the Contractor fails to complete the works by the required date, it is liable for DLDs. However, in some circumstances the Contractor is entitled to an extension of the date for completion.

What if the EPC contract excludes the parties' rights?

In addition, if the EPC Contract excludes the parties’ rights to claim their consequential or indirect losses, these clauses should be an exception to that exclusion. The rationale is that the rates of liquidated damages are likely to include an element of consequential or indirect losses.

What should a properly drafted EPC contract include?

However, a properly drafted EPC Contract should include the guidelines for testing. Testing methodology: Reference is often made to standard methodologies, for example, the American Society of Mechanical Engineers methodology. References will need to identify if specific versions or editions are relevant.

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