- No. 3-7, 2 Rio Tower, Persiaran Rio, Bandar Puteri
- +6016 276 2667
- Mon - Fri 9am - 6pm
- 3-7, 2 Rio Tower, Persiaran Rio, Bandar Puteri, 47100 Puchong, Selangor
- +6016 276 2667
- Mon to Fri | 9 am to 6 pm
A solar project contract is not a formality. It is the document that determines how risk is allocated, how payment is structured, what happens when performance falls short, and what remedies are available when things go wrong. Contracts that look straightforward at heads of terms often contain gaps, imbalances, or ambiguities that only become apparent when a dispute arises or when a lender or acquirer reviews the project documents.
The time to fix a contract is before it is signed. Not after.
Shu Pin reviews and negotiates solar project contracts for developers, Engineering, Procurement, Construction & Commissioning (EPCC) contractors, subcontractors, investors, and corporate offtakers across all Malaysian solar schemes namely the Large-Scale Solar (LSS) programme, the Corporate Renewable Energy Supply Scheme (CRESS), the Community Renewable Energy Aggregation Mechanism (CREAM), Solar ATAP, SELCO, and across residential, Commercial and Industrial (C&I) and utility-scale projects.
Solar projects are supported by a stack of interdependent contracts. A weakness in one creates exposure across the others. Shu Pin reviews and negotiates the following:
The PPA or BESC is the revenue contract of the project — the agreement that governs how solar energy is sold, at what price, and on what terms. Under the CRESS framework, the BESC is a privately negotiated agreement between the Renewable Energy Developer (RED) and the Green Consumer, guided by the Energy Commission’s minimum requirements but with significant room for commercial negotiation. Key provisions to review include pricing and escalation mechanisms, tenure of supply, billing and metering arrangements, performance obligations, supply interruption procedures, force majeure provisions, and termination rights. A BESC or PPA that is poorly negotiated creates uncertainty over pricing adjustments, maintenance obligations, and response procedures that frequently give rise to disputes and operational disruptions.
The EPCC contract governs how the solar system is built — the most significant financial exposure in a solar project. Payment structures, performance guarantees, defects liability periods, delay damages, variation procedures, and termination provisions all require close attention. Imbalanced risk allocation in an EPCC contract particularly around payment security and performance obligations is one of the most common sources of solar project disputes in Malaysia.
Where an EPC contractor engages subcontractors for specific works, the subcontract must flow down the key obligations and risk allocation from the main EPCC contract. Misalignment between the main contract and the subcontract creates gaps in liability that the contractor carries. Payment security, back-to-back provisions, and variation and delay mechanisms are the areas most frequently inadequately addressed.
The O&M agreement governs the ongoing performance of the solar system after commissioning. Performance targets, response time obligations, scheduled and unscheduled maintenance, liability for underperformance, and termination provisions are the key areas to review. A poorly drafted O&M agreement that does not tie performance obligations to the revenue commitments in the PPA or BESC creates a mismatch that the project owner carries.
The land or roof leasing agreement secures the project’s physical foundation for the duration of the project, typically 21 years for LSS projects. Key provisions include lease duration and renewal terms, access rights, restrictions on the landowner’s use of the land and decommissioning obligations. Under the revised CRESS Guidelines, a Renewable Energy Developer (RED) may now submit term sheets for the land lease agreement at the application submission stage with the executed agreement required within three months of receiving conditional verification from Single Buyer. This means the legal documentation needs to be ready to execute on a compressed timeline.
Where a project involves more than one investor or developer, the joint venture agreement governs the relationship between the parties such as decision-making, funding obligations, reserved matters, exit mechanisms, and what happens if the project encounters difficulties. These agreements are often negotiated quickly and under commercial pressure. Gaps in the drafting surface later, usually at the most inconvenient time.
Shu Pin’s starting point is always the commercial deal — what the parties have agreed, what scheme governs the project, and what the client’s position is in the contract structure. The legal review is then focused on whether the contract reflects the commercial deal, closes the material risks, and is consistent with the other project documents.
The review is not a mark-up exercise that flags every non-standard clause. It is a focused assessment of the provisions that actually matter — risk allocation, payment protection, performance obligations, liability exposure, and termination rights with clear recommendations on what to push back on, what to accept, and what to escalate.
Where contracts are being negotiated rather than just reviewed, Shu Pin advises on the positions to take, the alternatives to propose, and the commercial and legal consequences of the positions on the other side. For sophisticated counterparties — Tenaga Nasional Berhad (TNB) under LSS, large EPC contractors, or experienced corporate offtakers under CRESS — understanding the counterparty’s likely positions in advance is part of the work.
Bidding for LSS or CRESS allocations who need to understand the legal commitments in the bid package before submission.
Who are reviewing main contracts or subcontracts under time pressure and need a focused assessment of the risks they are taking on.
Entering CRESS or private PPA arrangements who need to understand the PPA or BESC terms and negotiate from a position of clarity.
Who have been presented with a land or roof lease agreement and want to understand their obligations and protections before signing.
Contract review engagements typically move quickly. Shu Pin works to the client’s timeline, prioritising the provisions that carry the most commercial and legal risk.
The output is a clear, practical assessment and not a lengthy legal opinion. What needs to change, why it matters, and how to ask for it. Where negotiation is required, Shu Pin advises on the positions to take and supports the negotiation through to a concluded contract.
If you have received a contract and are not sure whether legal review is needed, that question is worth asking before the signing deadline passes.
A Power Purchase Agreement (PPA) in Malaysia should be reviewed for pricing structure and escalation provisions, the tenure of supply and renewal terms, performance obligations and what triggers a breach, termination rights and the consequences of termination, force majeure provisions and how they interact with payment obligations, and any change-of-control or assignment restrictions. The PPA is a long-term contract where provisions that seem minor at signing can have significant financial consequences over a 21-year project life.
A Bilateral Energy Supply Contract (BESC) is the core commercial agreement between a Renewable Energy Developer (RED) and a Green Consumer under the Corporate Renewable Energy Supply Scheme (CRESS). It is guided by the Energy Commission’s minimum requirements but allows significant flexibility for commercial negotiation. Key terms to negotiate include energy pricing and adjustment mechanisms, billing and metering arrangements, performance and supply obligations, response procedures during supply interruptions, force majeure provisions, green attribute arrangements, and termination rights. A BESC that is not properly negotiated creates uncertainty over commercial terms that can give rise to disputes long after the agreement is signed.
The most common risks in Engineering, Procurement, Construction & Commissioning (EPCC) contracts for Malaysian solar projects include imbalanced payment structures that do not adequately protect the contractor, performance guarantee provisions that set thresholds the system cannot realistically meet, extended defects liability periods that are excessive, variation procedures that leave the contractor exposed to uncompensated scope changes, and delay damages provisions that are disproportionate to the contract value. These risks are significantly less expensive to address at contract stage than to dispute after works have commenced.
Yes and the earlier the better. A subcontract that does not flow down the key obligations and risk allocation from the main EPCC contract creates gaps in liability that the subcontractor carries directly. Payment security provisions, back-to-back terms, variation and delay mechanisms, and termination rights are the areas most frequently inadequately addressed in solar subcontracts. Subcontractors who sign without legal review often discover these gaps when payment is withheld or a dispute arises.
A focused review of a single contract — PPA, BESC, EPCC, or O&M agreement can typically be completed in five to seven business days, depending on the length and complexity of the document. Reviews involving multiple interdependent contracts, or where negotiation support is required, take longer. Engaging legal review early — before the deadline to respond to a draft allows adequate time for a thorough review without commercial pressure.
Shu Pin has been our legal adviser for several years and has supported us on various matters in the solar industry. What we value most is her ability to see matters from both a legal and business perspective. She is knowledgeable about the industry, easy to speak with and genuinely takes the time to understand our concerns. We can always rely on her for considered and practical advice.
CJ Woo, Director, The Solar House Sdn. Bhd.
Tell us what you have and where you are in the timeline. Shu Pin will give you a clear assessment of the risks and what needs to change before you commit.
Malaysia’s Dedicated Renewable Energy Legal Practice.
We help you get the contract structure right before the risk becomes real.