Why EPC selection is the most critical decision in SA’s energy transition

As South Africa’s renewable energy market expands and matures, more companies are turning to private energy infrastructure to manage costs, reduce reliance on the grid and secure long-term power supply.

Commercial solar installations, hybrid systems and off-grid solutions are increasingly becoming part of core business strategy in sectors ranging from mining and manufacturing to agriculture and logistics.

But while the technology behind renewable energy has matured significantly, the decision of who builds that infrastructure has become just as important as the decision to invest in it.

For companies planning energy projects that may operate for 20 years or more, selecting the right EPC (EPC) partner is emerging as one of the most consequential decisions in the entire process.

Poor engineering choices, inexperienced contractors or weak operational support can undermine system performance, introduce safety risks and erode the financial case for renewable investment.

As the market grows and new entrants emerge, business leaders are increasingly asking the same question: how do you distinguish a credible EPC partner from a risky one?

Why EPC selection matters now

South Africa’s commercial and industrial renewable energy market has grown rapidly in recent years, driven by electricity supply instability, rising tariffs and regulatory changes that have opened the door to private generation. As a result, companies that once relied exclusively on a single national supplier are now entering long-term infrastructure partnerships with private energy providers.

That shift fundamentally changes the decision-making process.

“In the past, businesses effectively had one electricity supplier,” explains Claude Peters, managing director at RenEnergy. “Now that companies have the opportunity to choose a partner for their energy infrastructure, the decision shouldn’t be driven by cost alone. There are many other factors that matter first.”

Unlike short-term operational purchases, energy infrastructure projects operate on multi-decade timelines. A poorly designed or poorly maintained system may continue to operate for years, but at significantly lower performance levels.

“You can install two solar systems of exactly the same size next to each other,” Peters says. “But if one is engineered better, it could produce 5% to 10% more energy every year. Over 20 years, that difference becomes enormous.”

In other words, renewable infrastructure is not just about installing panels. It is about engineering an energy system that performs reliably over decades.

The growing risks in a rapidly expanding market

Rapid industry growth inevitably attracts new operators. While many are experienced engineering firms expanding into renewables, others enter the market with limited large-scale project experience. This creates a new set of risks for businesses investing in major energy infrastructure.

“Inexperienced operators can present themselves as capable EPC providers very quickly,” Peters notes. “But installing a few rooftop panels is very different from designing and building a complex commercial energy system.”

The consequences of poor project design can be significant. Substandard engineering can introduce electrical safety risks, compromise building infrastructure or result in systems that fail to deliver expected energy output.

In extreme cases, companies may discover the contractor responsible for installation is no longer operating when problems arise. “If something goes wrong a year later and the EPC is no longer in business, who do you call?” Peters asks. “This is a long-term asset. You need to know the partner behind it will still be there.”

Another risk is underperformance. A solar installation may be sold on the basis of projected energy production for example, generating one million kilowatt-hours per year – but poor design or inadequate maintenance could result in significantly lower output.

“It might have been cheaper upfront,” Peters says, “but if the system only produces 60% of what was promised, it becomes a very expensive decision.”

5 criteria businesses should evaluate when choosing an EPC

For executives evaluating renewable energy projects, selecting an EPC partner requires a structured due diligence process. While the technical details may differ across industries and project types, several key evaluation criteria consistently emerge:

1. Engineering capability

At the core of any renewable energy project is engineering design. A credible EPC partner should demonstrate strong internal engineering expertise capable of modelling energy generation, system integration and load management across the entire lifecycle of the electricity system.

“In renewable energy engineering, you are looking at the full journey of electricity,” Peters explains. “From generation to grid interaction to consumption. That requires a broad engineering perspective.”

Companies should assess whether engineering work is conducted in-house, the experience level of the engineering team and whether designs are tailored to each project’s environment and energy requirements.

2. Procurement standards and technology selection

Component selection including panels, inverters, mounting systems and batteries has a direct impact on system reliability and lifespan. A credible partner selects ‘bankable’ technology components that insurers and lenders trust for the long haul.

Businesses should evaluate how EPC providers source equipment, whether they work with established technology suppliers and whether procurement processes include competitive supplier evaluation.

Environmental conditions also matter. Equipment that performs well in one setting may be unsuitable in others, such as high-dust mining environments or extreme temperatures. “Certain technologies perform better in specific conditions,” Peters notes. “The right solution should be selected for the environment.”

3. Installation quality and construction control

Even well-designed projects can fail if installation standards are poor.

Construction quality includes electrical integration, structural mounting systems and civil engineering considerations, particularly in regions exposed to strong winds or extreme weather.

Peters recalls a recent example in the Langkloof region where severe storms damaged surrounding structures while a nearby solar installation remained intact. “The mechanical design and installation quality make a significant difference in how systems withstand real-world conditions,” he says.

For this reason, forward-thinking companies prioritise EPC partners that maintain direct oversight of construction, ensuring accountability is not lost in a chain of subcontractors.

4. Long-term operations and maintenance

Renewable energy systems are often marketed as low-maintenance, but that does not mean they are maintenance-free. Cleaning, system monitoring, component replacement and performance optimisation all play a role in maintaining long-term energy yield.

“Solar systems still need to be looked after,” Peters says. “Even something as simple as panel cleaning can affect performance.”

Equally important is the responsiveness of the service provider when problems arise. “Infrastructure failures rarely happen during office hours,” he notes. “If a facility loses energy production on a Friday night, the response time matters.”

Sim Khuluse, technical and policy manager of the South African Photovoltaic Industry Association (SAPVIA), reinforces this lifecycle view: “Quality in solar projects cannot be confined to installation alone. It must be embedded across the full lifecycle – from engineering and procurement through to operations and maintenance – ensuring long-term performance and reliability. It is for this reason that SAPVIA will be launching a Working Group focusing on Operations and Maintenance.”

5. Financial stability and track record

Because renewable energy projects operate over long timelines, the financial stability and operational history of the EPC partner should also be considered.

A strong balance sheet established project portfolio and verifiable client references can provide reassurance that the company has the capacity to support infrastructure over its lifetime. Companies evaluating EPC providers should request reference projects and speak directly with existing clients: not only about successful projects but also about how problems were handled when they occurred.

“You cannot judge a partner only when things go well,” Peters says. “You must understand how they respond when things go wrong.”

From an industry perspective, SAPVIA has increasingly emphasised the importance of standardisation and due diligence in EPC selection. “Best practice frameworks exist to guide engineering design, procurement quality and construction management,” Khuluse notes. “These are critical not only for project success but for building investor confidence in the sector.”

Lessons from industry experience

As the renewable energy sector matures, industry standards and regulatory frameworks are gradually strengthening. Compliance requirements, engineering sign-offs and installation standards now play a greater role in project evaluation.

SAPVIA, while not a regulator, plays a key role in shaping these standards through industry guidelines, working groups and quality frameworks. Initiatives such as Operations and Maintenance best practice guidelines and the PV GreenCard programme aim to improve installation quality, safety and compliance across the sector.

“Industry bodies provide an important alignment function,” says Khuluse. “They help ensure projects meet recognised standards for safety, performance and regulatory compliance, even in a rapidly evolving market.”

Financial institutions are also introducing their own due diligence processes for EPC providers involved in financed projects, reflecting the financial risks associated with underperforming infrastructure.

Yet, many experienced industry participants argue that regulation alone cannot guarantee quality;

ultimately, responsible project development requires informed decision-making by businesses themselves.

“When companies invest in a renewable energy system, they are integrating new infrastructure into the most critical parts of their operations – the electrical backbone of the facility,” Peters says. “That is not something where corners can be cut.”

Renewable infrastructure as a long-term partnership

For many organisations, renewable energy investments are among the largest infrastructure decisions they will make this decade.

Panels, inverters and batteries may be the most visible components, but the long-term success of these projects depends on the engineering and operational ecosystem behind them.

That is why industry experts increasingly encourage businesses to approach EPC selection – not as a procurement exercise but as the beginning of a long-term partnership.

“The real test of a partner is not when everything is working perfectly,” Peters says. “It is when something goes wrong and they are still there to solve the problem.”

In a rapidly expanding renewable energy market, that distinction may ultimately determine whether an energy investment delivers its promised returns or becomes a costly lesson in infrastructure due diligence.

Image credit: Freepik/prostooleh