Partnerships Partnerships have been a winning strategy in the solar industry for many years. Today, leading developers have locked in capacity with two or three core EPC partners on average, bringing benefits to both sides (Exhibit 4). The idea of a partnership extends beyond simply establishing a select set of EPCs that bid on or are awarded work on a project- by-project basis. They can range from nonbinding relationship-based commitments to formal master service agreements with bilateral contractual commitments. All partnership arrangements share common objectives, such as increased visibility and joint planning of project pipelines, early engineering involvement and continuous improvement of designs, and collaborative workforce attraction and development programs.
EPCs and developers can form tighter partnerships, such as by facilitating more integration between their respective engineering teams or promoting transparency on pricing and risk. And those without committed partners might entertain new options; for example, a utility developer might invest in building the capabilities of a regional contractor to install solar at scale. Bold ambitions such as these could shift the market away from traditional contracting structures in which EPCs are treated purely as service providers that are compensated for delivering each project. Instead, owners and EPCs could pursue portfolio partnerships in which both sides have incentives to tackle supply chain and labor constraints together, unlocking additional value to be shared between them.
Exhibit 4 Leading solar players have established an average of two to three partnerships each to achieve a broad array of benefits.
Number of partnerships per solar player, % of companies
50
17
12
10
7
5
0
1
2–3
4–5
6–10
11+
Source: McKinsey Utility, Developer, and EPC Survey, Dec 2022, n = 42
McKinsey & Company
Accelerating the journey to net zero
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