For any solar order over $500k, an LC is safer than TT. This is the operational playbook: LC types, opening bank selection, discrepancy avoidance, and how Chinese suppliers actually get paid.
LC at sight fee (buyer)
0.15–0.30%
of LC value, opening bank
UPAS tenor
60–180 days
buyer pays at maturity
Discrepancy rate
~65%
first-presentation industry avg
LC at sight vs UPAS vs standby
| Type | Best for | Cost | Supplier gets paid |
|---|---|---|---|
| LC at sight | One-off large order | 0.15–0.30% + confirmation | against docs, 5 business days |
| UPAS | Import finance | 1.5–3% pa (tenor) | at sight, buyer pays later |
| Standby (SBLC) | Repeat orders | 0.5–1% pa | only if buyer defaults on TT |
Top discrepancy pitfalls
- BL issued after LC latest shipment date
- Insurance certificate underinsured (must be 110% of CIF)
- Certificate of origin missing chamber stamp
- Description of goods differs by even a comma from LC wording
- Late presentation (must be within 21 days of BL or LC expiry, whichever first)
Frequently asked questions
QWhich Chinese banks confirm LCs cheapest?
ICBC, BOC, CCB and Agricultural Bank all confirm at similar rates. Suppliers usually prefer BOC due to fastest doc processing.
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