Updated on January 3rd, 2023
A solar panel subcontractor agreement is a written arrangement between a general contractor and a solar panel subcontractor that establishes payment in exchange for services performed. The document defines the relationship between the parties and their obligations and responsibilities to each other. The terms and conditions should be negotiated before signing the form to ensure both parties feel they have come to an equitable agreement.
Why an Agreement is Important
Because a solar panel subcontractor (also known as a solar panel installer or photovoltaic (PV) installer) is not an employee of the general contractor, having a legally-binding written contract is imperative for decreasing risk exposure. A signed subcontractor agreement creates a legal relationship between parties, meaning that if they fail to uphold their end of the contract, the other party may seek restitution for the loss of time, money, or other damages.
A key function of the agreement is that it defines the role of the subcontractor as an independent worker, not an employee of the contractor. The subcontractor must maintain the necessary insurance, licensing, and other trade requirements; it is not the responsibility of the general contractor.
The tasks that the subcontractor is hired to perform must be described in the agreement, some examples of which would include:
- Site assessment and schematics.
- Measuring, cutting, and assembling structural framing and solar modules.
- Connecting PV panels to (and possibly making improvements on) electrical systems.
- Performing maintenance checks.
The parties must decide who will be in charge of providing materials, equipment, transportation, labor (i.e., workers under the subcontractor), and anything else the subcontractor needs to perform their duties.
The contractor and subcontractor must discuss the amount of money the subcontractor will receive for their services (typically a fixed fee or hourly rate). The frequency of payments should be decided as well to ensure compensation is received in a timely manner.
The parties can discuss whether or not they have the right to end the contract before the completion date. If they decide the agreement can be terminated, an appropriate notice period must be agreed upon.
Before Signing an Agreement
To establish a trusting arrangement and execute a project successfully, the parties may want to carry out the following actions before the installation process begins:
- Site inspection. The building (or blueprints if it has not yet been built) must be inspected by the installer to make sure they meet certain specifications (e.g., building codes) and conditions (e.g., structural integrity). Measurements should be taken to determine suitability for solar installation.
- Installation quote. The installer will provide a quote, including a list of equipment, materials, and labor required for the job.
- Negotiate terms. The parties should understand and agree to the timeline of the installation, the length of the warranty, and whether or not regular inspections will take place (and the additional cost, if applicable).