Preventing Solar Power 'Investment Fraud'... Government to Finalize Standard Contract Form in Early April

Ministry of Industry: "Responsible Completion of Solar Power Plants, Safety Measures to Guarantee Minimum Power Generation"
Reaffirming Commitment to Eradicate 'Solar Power Investment Fraud' Through Audits of 340 Companies and Cooperation with Police Fraud Investigations Since July Last Year

[Asia Economy Reporter Moon Chaeseok] The government announced that it will promote the preparation of a standard subcontract agreement to prevent solar power investment fraud. This comes eight months after announcing a comprehensive audit of about 340 companies participating in the distribution project last July and cooperation plans with the National Police Agency.

On the 19th, the Ministry of Trade, Industry and Energy stated that it has prepared the "Standard Subcontract Agreement (Draft) for Solar Power Generation Project Facility Construction" and will start gathering opinions from stakeholders from the 20th.

The ministry explained that as the number of solar power generation operators increases, the contract was prepared to protect operators from investment damages and disputes caused by some unreasonable contracts.

The policy is being promoted as part of the "Renewable Energy Side Effects Response Plan" from last July. At that time, the ministry conducted a comprehensive audit of the business execution status of about 340 companies participating in the distribution project.

Cooperation with the National Police Agency was also promoted, where after collecting cases of solar power damages, investigations would be conducted, and if necessary, the formation of a "Dedicated Investigation Team for Solar Power Investment Fraud" was considered.

The standard subcontract agreement being prepared by the ministry includes ▲ verification of electrical construction business license numbers to prevent unqualified sales and construction ▲ inducing responsible completion through defining the scope of completion and guaranteeing minimum power generation ▲ establishing the scope and procedures for mid-contract termination ▲ guidance on defect repair and warranty.

A notable point is that the scope of completion and the role of the construction company (subcontractor) according to it are clearly stipulated in the contract conditions. Through this, a safety device can be established to guarantee the operator's loss if the construction company (subcontractor) performs faulty construction.

Considering that last July the ministry considered conducting investigations in parallel with the National Police Agency by forming a dedicated investigation team for suspected collusion and corruption cases between permit holders and companies (individuals), the government has clearly reaffirmed its determination to eradicate "solar power fraud."

Along with the standard contract, a "Pre-contract Checklist" will be provided to include essential items to check before signing a solar power generation project contract. A "Promotion Procedure Chart and Submission Documents" will be prepared to allow viewing the project's progress flow. Through "Profitability Analysis" materials, the profit structure can also be confirmed.

The ministry plans to finalize the standard subcontract agreement early next month. Afterwards, it will distribute it to local governments, launch it on the Korea Energy Agency website, and guide prospective operators. It also plans to include this in "Solar Power Startup Support Education" so that operators can utilize it.

This content was produced with the assistance of AI translation services.