A clause-by-clause checklist for reviewing a renewable-energy EPC contract: scope of work and supply, price and payment, schedule and milestones, delay and performance liquidated damages, warranties and serial defects, security and bonds, risk allocation, handover and acceptance, and termination and force majeure — with the industry benchmarks a reviewer should test each clause against.
How to use this checklist
Work through each section against the contract and flag anything that departs from the benchmarks noted. The benchmarks below are published industry norms (from the PwC EPC guidance and standard market practice); adjust them to the specifics of your project and jurisdiction. This is a technical-review aid, not legal advice.
General information
- Contract title, date and signed status confirmed
- Employer and contractor parties (and any consortium members) identified
- Commencement date and any conditions precedent / subsequent listed
- Related contracts (O&M, PPA, grid connection) cross-referenced
Scope of work and supply
- Supply scope vs works scope clearly delineated
- Is major-equipment supply (modules, inverters) inside the contractor’s scope or free-issued?
- Employer’s requirements reviewed by both civil and electrical disciplines
- If not a full turnkey wrap, all interfaces and gaps between packages identified
- Does the stated scope include everything needed for a working, energised plant?
Contract price and payment
- Fixed lump-sum price and exclusions confirmed
- Per-MW price sanity-checked against the market
- Milestone payments tied to clearly defined events (and transfer of title), not front-loaded
- A proper variations-pricing mechanism exists
- Retention held to first generation revenue
Schedule and milestones
- Project schedule, scheduled commercial-operation date and key milestone dates defined
- Taking-over / performance-certificate procedure specified
- Critical-path realism assessed
Liquidated damages
Draft delay LDs (DLDs) and performance LDs (PLDs) separately.
- Delay-LD trigger, rate and cap defined (market norm ~10–15%)
- Performance-LD (linked to guaranteed PR) defined (market norm ~10–15%)
- Combined LD cap (~20–25%) and overall liability cap (commonly ~100% of price) reasonable vs the financial model
- Fail-safe drafting present so a struck-down LD regime still yields capped general damages
- Beware contractor-favourable “exclusive remedies” clauses
Warranties, defects and liability
- Defects Liability Period term and commencement confirmed (market norm 12–24 months)
- Defect-notification and response mechanism defined
- Equipment warranties assignable to the lender and from solvent manufacturers
- Serial-defect provision present (a same-root-cause defect above a threshold — e.g. ≥5% of a population — obliges rectification across all units)
- Overall limits of liability and consequential-loss carve-outs reviewed
Security and bonds
- Performance bond (market norm ~10–20% of price)
- Retention (~5–10%) — modern practice is a bank guarantee or cash retention, not both
- Advance-payment guarantee
- Parent-company guarantee where the contractor is a subsidiary
Risk allocation, testing and acceptance
- Ground, weather and environmental risk allocation reviewed (extension of time vs cost)
- Performance-ratio (PR) testing regime defined
- Minimum PR to certify COD (market norm ~95–98% of guaranteed PR); right to withhold ~5–10% of price between minimum and guaranteed PR
- Transfer of risk at taking-over is clear
Termination and force majeure
- Termination rights for each party defined
- Force majeure treated as a neutral risk with an exhaustive event list and a duty to mitigate
- Prevention principle addressed so time is not set “at large”
- Dispute-resolution mechanism specified