Quick answer
Force majeure concerns relief from specified obligations when a qualifying event prevents or impedes performance, subject to the contract, governing law, causation and procedural requirements.
Answer: Force majeure concerns relief from specified contractual obligations when a qualifying event prevents or impedes performance. In solar projects, the analysis depends on the agreement, governing law, affected obligation, causal evidence, notice and mitigation requirements. A storm, supply delay or new tariff does not automatically excuse performance, increase the price or cancel the contract; the available remedy must be established.
What force majeure means for a solar project
EPC agreements, equipment supply contracts and power purchase agreements can allocate disruption risk differently. An event may affect delivery, construction access, commissioning or electricity supply without affecting every obligation in the same way. Read the actual agreement rather than treating “force majeure” as a general permission to stop work.
The ICC’s 2020 model clauses combine specified events with a general formula and offer separate hardship provisions. They are drafting models incorporated into a contract, not automatically applicable law for every solar project.
Do not assume the absence of a named clause proves that no legal relief exists anywhere. Governing law may have relevant doctrines or statutory provisions, and their scope differs. This glossary explains project records and questions to review; qualified legal advice is needed for a particular claim or contract wording.
Evaluate the event and the affected obligation
| Possible disruption | Questions to establish |
|---|---|
| Storm, flood or wildfire | What was damaged or inaccessible, which obligation was affected, and what event and site evidence exists? |
| Government action or import restriction | What binding measure applies, when did it take effect, and does the contract allocate it as force majeure, change in law or another risk? |
| Supplier or shipping disruption | What prevented delivery, what alternatives were evaluated, and how does the agreement treat suppliers and subcontractors? |
| Public-health restriction | What actual restriction or other impediment affected the work, and for which period? |
| Cost increase | Is the issue inability to perform, commercial hardship, price adjustment or an allocated business risk? |
The name of an event is not the full analysis. Establish its connection to the delay, the contractual test and any exclusions. Increased cost alone does not automatically establish force majeure, but neither is one blanket exclusion rule appropriate for all contracts and jurisdictions.
Clause and notice checklist
Review these points with the responsible contract team:
- Trigger and exclusions: the event definition, required threshold and risks assigned to each party.
- Causation and scope: which duties are prevented or impeded, how much delay is attributable, and which duties remain unaffected.
- Notice: recipient, permitted delivery method, content, deadline and required updates. Do not substitute a generic five- or fifteen-day rule.
- Mitigation: practicable alternatives, safe unaffected work and evidence of steps taken. An equipment substitution still needs its own design and approval checks.
- Relief: time extension, suspension, payment obligations, cost allocation and any liquidated-damages treatment. These are separate questions.
- Long-stop and termination: duration threshold, who can act, procedure and settlement of work, deposits and materials.
UNIDROIT’s Article 7.1.7 and commentary illustrate an impediment-based approach, temporary relief and notice obligations. They also distinguish their approach from domestic doctrines. Do not treat the Principles as the governing rules for a project without establishing their applicability.
Keep the project record usable
Record the event date, discovery date, notice date, affected tasks, schedule revision and evidence. Keep supplier communications, access restrictions, mitigation options and daily work records. The cost-impact period, event period and legally effective relief period may differ.
Designers should preserve the baseline drawings and proposed substitutions. Installers should document work that can and cannot proceed safely. Sales and project teams should communicate the current assessment and uncertainty without promising a remedy that has not been established.
Review the interface between contractor terms, the equipment order and the power purchase agreement. Relief under one contract does not necessarily pass through to another. Likewise, an insurance claim has its own coverage, conditions and deductibles.
Example: estimate exposure without assuming compensation
Consider a hypothetical 90-day interruption. Assume an outstanding $8 million financing balance, 6% simple annual interest using a 365-day convention, and $200/day in incremental insurance and security costs. If the applicable project scenario also loses 22,000 kWh/day of sales at $0.07/kWh:
Daily interest = 8,000,000 × 0.06 / 365 = $1,315.06849
Daily carrying cost = 1,315.06849 + 200 = $1,515.06849
Daily gross sales exposure = 22,000 × 0.07 = $1,540
90-day combined exposure = (1,515.06849 + 1,540) × 90
= $274,956.16Use unrounded daily values before rounding the total. This scenario combines assumed carrying costs and foregone gross sales; it is not net profit, proven damages or an entitlement to payment. Check whether both categories actually coexist, subtract avoided costs where relevant and avoid counting insurance or other recoveries twice. A delayed construction milestone payment is not automatically lost energy revenue.
An offtake agreement determines sales obligations and relevant payment treatment. Contract review, causal schedule analysis and the actual financial records determine which exposure is applicable; the dollar estimate alone does not determine the remedy.
Frequently asked questions
Does a supply-chain delay automatically qualify?
No. The contract, governing law, cause, affected obligation, alternatives and notice requirements need review. Supplier delay alone does not establish every condition for relief.
Does force majeure automatically permit a price increase?
No. Timing relief and price adjustment are different issues. Examine the agreement’s force majeure, hardship, change-in-law and pricing provisions.
Is there a universal termination deadline?
No. Use the applicable contract and law, including notice and settlement procedures. Do not assume a standard 180- or 365-day right.
Does an exposure calculation establish damages owed?
No. It supports financial assessment. Legal entitlement, causation, recoverable categories and mitigation must be established separately.
Related Glossary Terms
About the Contributors
CEO & Co-Founder · SurgePV
Keyur Rakholiya is identified by SurgePV as its CEO and a company co-founder. His SurgePV author page lists only role information that can be tied to the public profile below; credentials, project totals, testing claims, media appearances, and speaking engagements are not asserted without retained evidence.
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