What is PPA?
A Power Purchase Agreement (PPA) is a long-term contract for buying clean energy at a set price from a specific source, established between a renewable energy developer and a consumer—typically a business with high electricity needs—or between a developer and a supplier who then redistributes the energy. Entering into a PPA signifies the transaction of a project along with its environmental benefits (such as Guarantees of Origin).
Understanding Solar Power Purchase Agreements (PPAs)
A Solar Power Purchase Agreement (PPA) is a financial arrangement that enables the deployment of solar energy with minimal barriers. Under a PPA, a renewable developer is responsible for the design, permitting, financing, and installation of a solar energy system on a customer’s property at little to no upfront cost. The power generated by this system is then sold to the host customer at a fixed rate, typically lower than the prevailing retail rates offered by local utilities. This arrangement not only facilitates immediate savings on electricity costs for the customer but also offers a revenue stream and potential tax benefits for the developer.
