Where solar EPC money leaks between quote and final payment
Seven leak points from the survey to the last milestone, ranked by how quietly they drain margin and cash. A map to the rest of the guide.
- Seven leaks: survey, BOM drift, late material, unpriced change, waiting approvals, aged final milestones, untracked warranty and service.
- Margin leaks and cash leaks are different clocks; both need watching.
- Most leaks are visible weeks earlier than the final bill, if the data is connected.
- Start with the leak that costs you most last quarter.
Quick answer
Solar EPCs rarely lose money on equipment. They lose it in seven places: survey gaps, BOM drift after the quote, late material, unpriced changes, approvals that wait, receivables that age on final milestones, and warranty or service costs nobody tracked. Each is small and invisible until project close. The common fix is one project record that connects quote, purchases, site work, approvals and billing.
The seven leaks
| # | Leak | Early signal | Where to read the fix |
|---|---|---|---|
| 1 | Survey gap: roof, shading, cable run measured loosely | Design revisions after contract | Why projects overrun |
| 2 | BOM drift: items or quantities change after the quote | Purchases that differ from the quote | BOM control |
| 3 | Late material: crew booked, material missing | Idle crew days | BOM control |
| 4 | Unpriced change: scope moves without a price | Changes with no cost recorded | Project costing |
| 5 | Waiting approvals: DISCOM steps start late or stall | Days waiting per project | Approvals tracking |
| 6 | Aged final milestones: commissioning and retention dues | Final milestone age | Receivables |
| 7 | Untracked warranty and service | Claims without proof; AMC lapses | Warranty, O&M |
The leaks on the project timeline
Margin leaks versus cash leaks
They run on different clocks. A project can keep its margin and still strain your cash if approvals stall the last milestone. Another can bill on time and lose margin to drift. A useful discipline is to review two numbers weekly for each live project: forecast margin and days to next cash.
An illustrative example, with assumed numbers, appears in why projects overrun (a Rs 3,00,000 overrun halving a 15% margin) and in receivables and working capital (a project needing funding of 37.5% of contract value at its peak).
How to use this guide
Pick the leak that cost you most last quarter. If you cannot say, your first fix is not a system. It is a project ID on every purchase and expense, and a weekly look at committed against quoted cost. Chapter 3 shows how.
Next: the solar project lifecycle. Back to start here.
The seven leaks are our own model, not a measured ranking. Numbers referenced come from labelled illustrative examples in the linked articles.
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