Who Really Holds the Risk When Solar Quality Is Weak?

On a utility-scale solar project, the contracts spell out who is responsible when work turns out to be bad. Julie Stiglish, a master electrician and quality consultant for utility-scale solar, says the people who actually carry that risk are usually not the ones the paperwork names. She calls this answer a little controversial.

On paper, risk flows downhill. The owner contracts with the engineering, procurement, and construction (EPC) contractor, and the EPC passes its obligations down to subcontractors through warranties and indemnities. In practice, when a defect shows up in year three, the owner calls the EPC, not the racking or electrical sub. The sub may have finished, demobilized, and moved on to other projects.

You can transfer liability in a contract, you can’t transfer the consequences.

Julie Stiglish

Her answer to what you can do about it is to control the work while it’s happening. That’s the thread through her course, Utility-Scale Solar QA/QC Fundamentals, which includes a responsibility matrix for the owner, the EPC, and the subcontractors. Enroll your team today!

Transcript below.

I’m going to get a little controversial on this one.

I wish everyone understood who holds the risk when quality is weak, because it’s usually not who they think it is.

On paper, risk flows downhill. The owner contracts with the EPC, and the EPC flows those obligations down to a subcontractor through warranties and indemnities. So it’s easy for the EPC to think, if the sub’s work is bad, it’s the sub’s problem. The owner isn’t buying a contract. They’re buying an asset that has to perform for the life of the PPA (power purchase agreement), often 30 years or more.

When a defect shows up in year three, the owner doesn’t call the racking subcontractor or the electrical subcontractor. They call the EPC. And the EPC is on the hook for workmanship it didn’t directly control, performed by workers it didn’t hire or train or supervise day to day.

Meanwhile, the sub may have finished the job, demobilized, and moved on to three other projects, five other projects, and may simply not have the balance sheet to cover these larger claims.

So the paper says the sub holds the risk, but in reality it’s the EPC that holds it, and the EPC can’t make it right. If they can’t make it right, the owner holds it.

You can transfer liability in a contract. You can’t transfer the consequences.

The only way to actually control that risk is to control the work while it’s happening. That’s what the EPC’s QA/QC does, and it’s why it’s so important to work closely with your own team, your subcontract team, and your owner’s reps. Understanding that the consequence is down the road kind of changes the idea of who that risk is actually on.

Build the skills to control risk while the work is happening.

Utility-Scale Solar QA/QC Fundamentals puts you in the site quality manager’s seat on Sagebrush Flats, a fictional 150 MW DC project. Across 8 modules and about 4.5 hours of video, you learn who owns QA, QC, and commissioning, practice the calls that come with the job, and finish with a working toolkit. It’s self-paced, with a year of access.

Enroll in Utility-Scale Solar QA/QC Fundamentals