In SolarTech’s continued effort to hasten the implementation of renewable solar energy projects on state and local levels, the company has made the industry’s first engineering procurement and construction (EPC) contract template for solar financing, which is anticipated to go hand in hand with the power purchase agreement (PPA) that was released in 2009.
The template was developed by solar finance, project development and legal experts on SolarTech’s finance committee and in addition to lowering project costs, also provides solar developers and contractors a starting point in discussing terms and conditions that are fair and equally balanced between all parties.
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“Our guiding principles in developing this form were, first, to achieve sufficient balance in the allocation of risks that both contractor and owner would feel comfortable with the terms, and second, to include provisions typically acceptable to the financial community, without whose acceptance, there would be no projects at all,” said Howard Susman, partner at Stoel Rives. “We will endorse the use of this template with our clients and look forward to working more with SolarTech to make balanced and standardized legal instruments an industry norm.”
Since most EPC contracts have the reputation for being rather convoluted and lead to legal review and extensive negotiations, which tend to slow down a solar projects process and increase its cost, the new template aims to diminish the negative side effects. With the new template, SolarTech projects that contract negotiations should be reduced by 50% to 75%, therefore cutting the overall cost of legal fees while expediting the development of a solar project.
In addition to the team at SolarTech, Dustin Keele, executive vice president and co-founder of Photon Energy Services used his background in project finance and development to make sure that the template could be used in various solar finance agreements, including PPA’s, tax lease back programs and bond financing.
“SolarTech is actively pursuing a balance of system project cost reduction of 2 cents/kWh. Standardized contract templates help us achieve this goal by eliminating hidden expenses and risks,” said Doug Payne, executive director of SolarTech. “We are pleased to introduce the EPC template, which we believe will become an invaluable tool that further enables the industry to execute faster at lowest possible cost to accelerate the growth of solar as an affordable clean energy alternative.”
SolarTech members are able to complimentary download the EPC contract template here.