A power purchase agreement (PPA) is a contract in which a customer agrees to purchase the energy produced by a generator over a specified period of time at a predetermined price per megawatt hour. In physical PPAs, the purchaser takes ownership of the electricity, which is usually delivered to the buyer’s facilities for consumption.
Also known as Direct PPA
Physical power purchase agreements (PPAs) are contracts that allow a property owner, such as a local government, to receive the benefits of renewable energy without the upfront costs of a renewable energy installation. In a typical physical PPA, a developer arranges for the design, financing, and installation of a renewable energy system at little or no cost to the property owner, and then sells the electricity produced to the property owner at a predetermined rate. To set up a physical PPA, customers generally need to be in a market that provides retail electricity choice, as the ability to switch providers gives cities the necessary leverage to complete one of these transactions. Cities with municipal utilities or electricity CCAs are exceptions to this rule. If you are interested in establishing a PPA, learning about existing projects and the current market is a good first step. Please visit the links for SEIA and AWEA for more information (see below). To see a map of large-scale solar projects in the U.S., click here. To see a map of large-scale wind projects in the U.S., click here.
- Can I choose my electricity provider?
SharedRenewablesScorecard.org; SharedRenewables.org; DSIREusa.org; NREL.gov