What Is a Solar Contract Lawyer?
A solar contract lawyer is a legal professional specializing in contracts related to solar energy systems. They provide a range of services, from legal advice and drafting contracts, to representation in disputes or negotiations. Their primary role is to ensure that all legal agreements are in compliance with applicable laws and are fair for all parties involved.
In the context of solar energy, a contract lawyer plays a crucial role in both the residential and commercial sectors. They help developers, investors, and end-users navigate the complex web of local, state, and federal regulations governing solar projects. This includes all stages of a solar project’s life cycle, from the initial stages of development through to installation, operation, maintenance, and finally, decommissioning and retirement .
Solar contract lawyers are experienced in negotiating and drafting contracts for power purchase agreements (PPAs), solar leases, construction contracts, operation and maintenance agreements, and other solar-specific contracts. They ensure proper warranties, obligations, liabilities, and dispute resolution methods are detailed in the agreements. Misunderstandings or omissions in such contracts can lead to costly disputes down the road, making the solar contract lawyer an essential figure in any solar project.
For those considering investing in a solar system or developing a renewable energy project, a solar contract lawyer is invaluable. Not only do they understand the technical aspects of the energy contracts, but they also have the expertise to effectively communicate this to their clients and advocate in their best interests.
Types of Solar Contracts
In the previous section, we briefly discussed the importance of a solar contract lawyer. These lawyers can help you better understand your contract and solve disputes. But what types of contracts are there? A solar contract lawyer will likely work with these contracts if you have solar energy system.
PPAs
Power Purchase Agreements (PPAs) are the most common type of residential solar contract. A PPA describes how the seller will provide renewable energy to the customer, as well as how much the customer agrees to purchase the energy for. For example, you might agree to $0.12 per kilowatt-hour rate for energy. The PPA will describe any fees or charges associated with the installation. It will also include specifics about the invoice process. PPAs are generally 15 year agreements, although some companies offer 25 year plans.
Third Party Leases
Third party leases are similar to PPAs, but instead of paying for energy, you pay a monthly lease amount. Like a lease for an apartment, the agreement will be for a certain period of time – typically 20 years. In addition to the monthly lease amount, you typically pay some sort of Maintenance fee. The Maintenance fee will usually cover the basic maintenance like the upkeep of the solar panels or the inverter. However, you may be responsible for other costs; for example, if a tree branch falls on a panel, you may be responsible for paying to replace it.
Residential EPC Contracts
EPC contracts outline the terms between a contractor and the customer for the construction and installation of a solar energy system. EPC contracts are relatively uncommon for residential systems. However, if you plan to purchase an energy system, an EPC contract can be a good option. It typically includes a detailed description of the system. There are usually design specifications, deadlines, setting the terms for any scheduled services, and the compensation. EPC contracts are typically structured with one pric and divided into progress payments. Progress payments is where you only pay for completed work.
Commercial EPC Contracts
Commercial EPC contracts are similar to residential contracts, but they are typically more complex. Commercial EPC contracts are for larger systems so can be for 10MW solar farms or larger. But they also typically cover the due diligence and exits strategies.
Solar Contract Clauses
Before signing any contract, it is crucial for you to understand the terms and implications of the contract and also to know whether these are standard terms for similar contracts. Examples of such terms include:
- Liability clause
- Duration
- Guarantee of performance
- Payment terms
- Provisions for late payments
- Termination clauses
- Indemnification clauses
- Whether the contract provided for force majeure event
- Warranties
- Limitation of liability
Some of these terms are obligatory to bring as a full representation of the contract otherwise will be ineffective under most jurisdictions. But some terms a lawyer will appreciate more because they can save his/her client’s money.
It is crucial for the parties, especially the party who bear the cost, to have a guarantee of performance that will makes them feel secured. The solar company will give the guarantee of performance, which means particular annual generation (kWh) and if it fails to generate this amount, the company will compensate you or will provide additional energy to make up the loss generation.
It is also important to have limitation of liability especially with regard to consequential damages like loss of any income stream that it could affect the business or civil life. But these contracts often overlook to have such clause which would put the client into disadvantage if an issue arises.
Regulations and Solar Contracts
The complex web of regulations surrounding solar contracts and agreements can be a major headache for property owners and developers. A solar contract lawyer has the necessary expertise to guide you through the legal requirements, ensuring compliance with both federal and state laws. Federal laws commonly come into play when it comes to financing incentives, grid connection agreements, or solar easements. Each state also has its own set of laws and public policies, such as those dealing with solar energy credits (SRECs) or net metering agreements. Your lawyer can offer specific advice on how to structure a contract while taking all relevant state laws into account.
There are also local ordinances and permits that must be obtained before placing solar panels on a property . The necessary building permits will vary from city to city, but many municipalities offer streamlined procedures for solar project applications. A lawyer can help you find out whether this applies to your situation, as well as getting a proper local government permit issued for your solar installation.
Through a contract, property owners and developers can take advantage of the numerous federal, state, and local incentives available for solar array installations. These may involve tax credits, grants, and other forms of financial assistance. There are certain requirements to qualify for and access these incentives, such as obtaining proper certifications and permits for the completed work. A skilled solar contract lawyer will walk you through all of these requirements and ensure you have everything you need to access the incentives in question.
Solar Contract Disputes
Dispute resolution over the solar array quality, performance, and obligations to maintain and repair solar systems are inevitable. The resolution of a dispute arises before or during claims arise.
Before a claim, we strive to avoid disputes. We assist to bring the best solar contracts and solar system manufacturers to our clients. We draft and negotiate those solar agreements. Most solar energy contracts have a "Notice of Intent" requirement to notify the party before proceeding to a formal dispute resolution proceeding (discussed below). The Notice of Intent often times times require mediation, which is discussed below, with the other party.
Our solar contract lawyers work hard to avoid disputes. As an example, in recent litigation a solar contractor agreed to arbitration with our solar client. In that case, the other party’s position had little merit. After unsuccessful mediation and without the need for a costly arbitration, the matter resolved on the merits with the parties placing blame on one another.
During a dispute, our legal representation addresses each claim alleged in the complaint (or complaint/tcounter-claim) or answer/affirmative defenses. During disputes a solar contract attorney:
Dispute Resolution during a formal process including mediation and arbitration requires counsel experienced in those processes. Mediated solution is preferred to lengthy court litigation or arbitration. The primary expense during a dispute is the cost of legal counsel.
Sometimes that windows for a culturally acceptable resolution will pass. The right attorney with solar construction experience can help you navigate to a successful resolution.
The general framework for dispute resolution in solar energy litigation includes:
Litigation & Discovery – Once a lawsuit is filed, the parties will engage in discovery to learn the opponent’s legal positions. The parties do not need to agree to mediation Discovery can be extensive, depending on the industry. For litigation including solar energy cases, discovery usually consists of:
• Document Requests
• Interrogatories
• Requests for Admission
• Notice of Deposition of Parties, Third-Party Witnesses, and Experts
Mediation – During mediation, a third party will work with the parties to obtain a resolution. Mediation is non-binding, meaning that the parties are not held to the resolution reached during the mediation. The mediator will not make a decision on the contested issue. Mediation is typically short, lasting only one day.
Arbitration – Like mediation, parties can agree to arbitration prior to or during a dispute. The parties will submit to a third party decision-maker to resolve the dispute (see article "Litigation may be only one option for dispute resolution in California"). Arbitration can be binding and is usually like litigation, but less formal and faster.
Selecting a Solar Contract Lawyer
When choosing a solar contract lawyer, it is important to spend time addressing the crucial question of whether you are selecting the right lawyer for your specific solar contract needs. Perhaps the most obvious focus should be on the number and types of similar contracts the lawyer has drafted. In addition, it is important to ask what guarantees the lawyer offers once the contract is in place. Can the lawyer be counted on to walk clients through the process and be there for any future changes to the contract? Does the lawyer guarantee success in case a dispute arises or if the contract fails to hold up over time?
Another important aspect is being upfront with the solar contract lawyer about what you want from the agreement . Some contracts can be much longer than others, so having a good idea about the length of the contract as well as its substantive content is critical. In addition, the lawyer should be proactive about suggesting ways to make the contract stronger and more comprehensive, so it is important to find out what kinds of guidance the lawyer can offer.
In general, doing research about past work on the part of the solar contract lawyer is vital to making a decision. Talking to other clients can help the individual determine whether the lawyer is successful in representing his or her interests while still being fair and on the level with the other parties involved.