WHAT IS A POWER PURCHASE AGREEMENT?
PPAs may only be used for projects in jurisdictions that permit third-party ownership of energy-producing equipment. Non-utility suppliers in regulated markets may face restrictions or prohibitions from selling electricity in certain states.
A power purchase agreement (PPA) is a financial agreement in which a developer arranges the design, permitting, financing, installation and operation of a solar or wind energy system on your land for little cost. The developer then sells you the produced electricity at a set rate that is often cheaper than the market rate of your local utility. PPAs generally vary from 10 to 25 years, and the developer is responsible for operation and maintenance of the system throughout the term of the contract. At the conclusion of the PPA contract period, you may have the option to extend the PPA, have the developer remove the system, or purchase it from them.
Your company or property may benefit from a PPA if:
- It Wants to lower energy expenses, hedge against rising energy prices, or enhance operational resilience without investing your own capital
- Wants a third party to be responsible for the ownership, installation, and maintenance of an energy system
- Exists in a state or jurisdiction that permits third-party ownership of generating equipment.
In the first situation, the energy produced by EBNT is supplied to the consumer through an approved supplier or utility company. The second scenario includes the PPA directly into the client's retail power supply contract.