Why solar EPC projects overrun cost and time, and where to catch it
Rooftop and C&I solar projects rarely fail on panels. They drift: a survey gap, a BOM change, a late delivery, an approval that sits. Five places the drift starts and the one comparison that catches it.
- Overruns are drift, not disasters. Small unlogged changes add up to a lost margin.
- Five sources: survey gaps, BOM changes, late material, waiting approvals, rework.
- In our illustrative example, a Rs 3,00,000 overrun halves a 15% margin to 7.5%.
- Compare quoted cost to committed cost weekly, per project, not company-wide at month end.
- Every change to scope or BOM needs an owner and a price, even if the customer is not charged.
Quick answer
Solar EPC projects overrun because the quote is built from survey assumptions that nobody compares against actuals until the project closes. Drift starts in five places: survey gaps, BOM changes after the quote, late material, approvals that wait, and rework from unclear handoffs. The fix is a live quote-versus-actual view per project, reviewed weekly, so margin loss shows up in week two instead of month six.
What does an overrun actually look like?
Rarely a single bad event. It looks like a roof that turned out to need a different mounting structure, a longer cable run than the survey sheet said, two extra days of crew idle waiting for inverters, and a rework visit because the design drawing and the site did not match. Each is small. Nobody adds them up until the project closes and the accounts team asks why it made less than quoted.
Where does the drift start?
Five places a solar project drifts from its quote
| Source | How it starts | Early signal | Control |
|---|---|---|---|
| Survey gap | Roof type, shading, cable run or load measured loosely | Design revisions after contract | Structured survey form with photos, signed off by design |
| BOM change | Substitution or quantity change after the quote | Purchase orders that differ from the quote BOM | Every change logged with a price delta |
| Late material | Supplier slips; crew booked anyway | Crew days booked with no material on site | Material-ready check before scheduling |
| Waiting approvals | DISCOM or authority step not started on time | Days since application, per project | Approval clock per project (see approvals tracking) |
| Rework | Design and site disagree | Second site visits | Handoff checklist from design to site lead |
How much can small drift cost?
An illustrative example. These numbers are assumptions, not benchmarks from any real project.
A C&I rooftop contract is signed at Rs 40,00,000. The quoted cost is Rs 34,00,000, so the planned margin is Rs 6,00,000, or 15%. Then:
- the roof needs a different structure: +Rs 1,10,000
- the cable run is longer than surveyed: +Rs 60,000
- a rework visit and idle crew days: +Rs 90,000
- a two-week delay adds finance and site overhead: +Rs 40,000
Total overrun: Rs 3,00,000. Actual cost becomes Rs 37,00,000, and margin falls from Rs 6,00,000 to Rs 3,00,000.
| Metric | Before | After | Change |
|---|---|---|---|
| Total cost | ₹34,00,000 | ₹37,00,000 | +8.8% |
| Margin (₹) | ₹6,00,000 | ₹3,00,000 | −50% |
| Margin (%) | 15% | 7.5% | −50% |
Half the margin is gone, and no single line looks alarming. That is why a month-end review is too late: by then the structure is fixed to the roof.
What is the one comparison that catches it?
Quoted cost versus committed cost, per project, every week.
Committed cost is the sum of purchase orders raised, supplier invoices received and labour days booked. It is available long before the final bill. If committed cost on a live project already exceeds the quoted cost for the work done so far, you know in week two, when you can still re-price a change, switch a supplier or hold a site visit.
To do this you need three things in one place: the quote BOM, the purchase orders, and the labour and site log, all tagged to the same project ID. That is exactly what breaks when quotes live in one file, purchases in another and site costs in a WhatsApp group.
Where does this advice not apply?
If you do a few small residential jobs a month, your margin per job is simple and a disciplined sheet is enough. This matters once several projects run in parallel, purchases are made by more than one person, or jobs include structural or civil work whose scope moves.
What to do this week
- Pick your three live projects. For each, write the quoted cost and the committed cost to date.
- List every change since the quote and whether it was priced.
- Decide who owns the weekly comparison. One name.
For a fuller treatment of costing, see project-wise costing and margin. Part of the guide Running a solar EPC business on connected systems.
The five drift sources and the weekly comparison are our own operating model, drawn from how project businesses commonly run; they are not a measured industry standard. The worked example uses assumed numbers and the arithmetic is ours (34,00,000 + 3,00,000 = 37,00,000; 40,00,000 minus 37,00,000 = 3,00,000; 3,00,000 / 40,00,000 = 7.5%).
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