Power Purchase Agreements
A solar Power Purchase Agreement (PPA) is an alternative to financing and owning a system. It provides the opportunity to install solar without the upfront costs or system operation and maintenance. Typical agreements range from 15-25 years, allowing the user the benefit of pre-set electricity prices.


Benefits

  • No upfront cost for solar


  • No capital investment, balance sheet debt, operating responsibilities


  • Pre-determined electricity rates for contract terms of 15-25 years


  • Places emphasis on ensuring maximum productivity of solar purchase


  • Customer purchases only what they need


  • Continued system monitoring and maintenance by solar professionals


  • Option to purchase the system at fair market value after set time period


Challenges

  • Complex negotiations and possibly higher transaction costs than buying system outright


  • Ongoing administrative costs of paying separate electricity invoice and allowing access to equipment by maintenance personnel


  • Customer may be contractually prohibited from making changes to property that could affect the solar production


PPA Structure
Determined in advance, the host customer does not own the solar system, but by the PPA provider, who as a utility, sells electricity at a negotiated rate matrix. This rate can be fixed for the duration of the contract; it may have a known escalator; or it can vary as keyed to the local utility or another benchmark. There are a number of other factors that will drive this model, including available incentives, rebates, REC programs, but like all structures, it needs to react to the needs of the individual customer.



Basic Parameters to a PPA project

  • Commercial, Municipal, Industrial customers using large amounts of electricity, generally more than 150,000kWh annually


  • Control of property


  • Demonstrate credit-worthiness


  • Offer a minimum of 10,000 square feet of usable space, preferably flat


  • Located in an area with pro-solar policies and incentives


Learn More
PPAs offers a wide range of customers the opportunity to buy only the solar power they use, and at a known rate for a set period of time. To learn more about PPAs and possible options for your customers, please contact us at 866-208-5041 or solar@gosunsolar.com.