• Earlier EPC involvement has shown potential savings and faster timelines
• Vertical integration carries execution risk

Industry stakeholders are looking for ways to cover the 30% cost they previously gained from federal tax credits now that they have sunset, and are considering Engineering, Procurement and Construction (EPC) models to reduce the overall cost of projects.

Jack Hachmann, COO at Madison Energy Infrastructure, pointed to the acquisition of EPC firm Pro-Tech Energy Solutions in November 2023 to strengthen its execution capabilities, according to a press release issued at the time.

Hachmann told NPM that having an EPC improved internal planning of projects led to increased efficiency, enabled projects to achieve completion faster, and created returns at a faster rate that could offset future costs.

Trail Ridge Power, another developer, is also exploring some form of EPC integration into its operations to increase efficacy and examine how it could impact overall project returns/offset the cost of projects, NPM has learned.

There is some value added to forms of EPC integration, however, there is currently not enough data on the market to note whether EPC integration could fully absorb the 30% loss generated from the lack of tax credits.

“It really depends on individual project and how you use the EPC,” said Hachmann.

A 2021 examination of EPC interaction for solar projects from Solar Power Europe notes that the earlier in the development process EPC is introduced, the lower the overall cost of the system. Developers with vertically integrated EPCs have this advantage, as coordination and planning of projects is often done earlier with in-house teams.

Some market examples also highlight a similar thesis – NPM reported in January 2025 that Nexamp used a self-performance model which included managing all the interconnection work for solar projects in Maine and Massachusetts, which ultimately led to a reduction in the cost of development of these solar projects. While the developer does not have a vertically integrated EPC, handling some of the EPC process led to significant costs savings and improved “delivery timelines.”

Vertically integrated EPC lessons

Integrating EPCs also require some caution, say industry experts.

Pinegate Renewables is a chief example of this – while its EPC arm was not the sole reason for the company’s bankruptcy, the challenges that the EPC business experienced played a role.

According to NPM reporting, its EPC arm Blue Ridge Power, experienced significant challenges estimating and managing project costs, as well as meeting construction deadlines. Raising capital was compromised amidst rising project costs and influenced the overall business.

When managing an EPC business, Hachmann said that the Madison team has found success at keeping the business small.

“We have a nimble team of about 10 or so people,” he said. He added that Madison does not solely rely on its EPC team when building out projects, which helps them the EPC arm of the business.

“We still outsource many projects to external EPCs,” said Hachmann.

Project costs continue to rise

Amidst the backdrop of the lack of tax credits, energy projects are becoming more expensive to build than before.

In the solar world, the current bottleneck for transformers, in addition to higher permitting and development costs, is related to longer interconnection timelines. These have also led to higher total CapEx costs.

A 2026 Lazard report estimates that utility scale project cost sits between USD 1.25m to 1.85m per MW for US projects, up from prior years.

While EPC integration could offer some relief, that relief differs project by project, said Ted Bleecker, Senior Director of Business Development at UNIRAC.

“Developers are exploring ways to cut costs,” said Bleecker. “This could be a way.”