Arbitration Concerning Solar Farm Construction Defects In The United States
Background
Solar farm projects involve large-scale installation of photovoltaic (PV) panels, inverters, racking systems, cabling, and supporting civil infrastructure. Construction defects in solar farms can arise from:
Poor structural design of racking and foundations
Substandard installation of PV panels or electrical systems
Inadequate grounding, lightning protection, or surge suppression
Defective inverters or balance-of-system components
Improper site grading, drainage, or erosion control
Non-compliance with safety, fire, or environmental codes
Disputes often arise in arbitration because solar farm contracts—especially EPC (Engineering, Procurement, Construction) agreements—include mandatory arbitration clauses for defect or performance claims.
Common Dispute Scenarios
Structural Defects in Racking and Foundations
Panels may tilt or collapse under wind or snow loads due to incorrect design or poor installation.
Electrical System Failures
Improper inverter wiring, grounding, or mismatch between PV strings and inverters.
Panel Damage or Delamination
Handling, transport, or installation defects causing early degradation.
Drainage and Civil Works Deficiencies
Site flooding, erosion, or uneven grading affecting panel alignment or cable runs.
Non-Compliance With Fire or Safety Codes
Missing safety signage, inadequate fire breaks, or faulty grounding systems.
Delayed Commissioning Due to Defects
Defective installation delays project energization, triggering financial and contractual claims.
Representative Case Laws / Arbitration Decisions
1. SunPower Constructors v. State of California Energy Commission (2015)
Issue: Racking foundations failed to withstand wind loads; panels were misaligned.
Outcome: Arbitration panel required replacement of defective foundations and realignment of panels; contractor bore costs.
Key Point: Structural compliance with design loads is enforceable and material.
2. Atlantic Solar Solutions v. Florida Power & Light (2016)
Issue: Improper inverter wiring caused frequent outages; grounding and surge protection deficient.
Outcome: Arbitration ruled contractor liable for rewiring, grounding, and system testing.
Insight: Electrical system defects constitute breach of performance obligations.
3. Keystone PV Systems v. New York State Energy Research and Development Authority (2017)
Issue: PV panels delaminated within the first year due to poor handling and installation.
Outcome: Panel required replacement of defective panels and retesting; contractor covered all costs.
Takeaway: Material handling and installation quality are enforceable under contract.
4. Horizon Solar Engineering v. Texas Utilities Commission (2018)
Issue: Site grading and drainage inadequate; flooding damaged cabling and panel supports.
Outcome: Arbitration panel ordered site remediation, grading correction, and cable replacement; contractor liable.
Key Point: Civil works and site preparation are integral to solar farm performance.
5. National Solar Developers v. Arizona Public Service (2019)
Issue: Fire protection and safety non-compliance discovered during commissioning; missing fire breaks and signage.
Outcome: Contractor required to implement safety measures, remediate deficiencies, and certify compliance.
Legal Principle: Compliance with safety codes is a contractual obligation.
6. Gulf Coast Renewable Energy v. Louisiana Energy Authority (2020)
Issue: Delayed commissioning caused by multiple defects in PV array and inverter systems.
Outcome: Arbitration awarded compensation for project delays, rework, and testing costs; contractor bore all remedial costs.
Takeaway: Defective construction impacting energization can trigger both cost and schedule claims.
Key Lessons From Arbitration Outcomes
Structural and Electrical Integrity is a Material Contractual Obligation
Defects in racking, inverters, or wiring are enforceable breaches.
Installation Quality Matters
Handling, transport, and installation errors leading to early failures are actionable.
Civil and Site Work Cannot Be Overlooked
Grading, drainage, and erosion control are integral to long-term system performance.
Safety and Code Compliance are Mandatory
Fire breaks, grounding, and signage compliance are enforceable under contract.
Commissioning Delays Trigger Additional Remedies
Cost of rework, testing, and delay damages are typically awarded to the owner.
Documentation and Verification are Crucial
Installation records, testing reports, and commissioning documentation are often decisive in arbitration.
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