Tools & Resources
Physical Off-Site Power Purchase Agreement (PPA)

Definition

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

Description

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.

Primary Considerations

  • Can I choose my electricity provider?

Sources:
SharedRenewablesScorecard.org; SharedRenewables.org; DSIREusa.org; NREL.gov

Physical Off-Site Power Purchase Agreement (PPA) Tools & Resources

Name
Author
Date
Type
3rd Party Solar PV Power Purchase Agreement (PPA) Database of State Incentives for Renewables & Efficiency (DSIRE) 2018 PPT
A State-by-State Policy Guide for Midsized Solar Customers National Renewable Energy Lab Factsheets
AWEA State Wind Energy Factsheets American Wind Energy Association 2019 Interactive Map
DSIRE (Database of State Incentives for Renewables and Efficiency) DOE/NC Clean Energy Technology Center 2018 Website
DSIRE Glossary Database of State Incentives for Renewables & Efficiency (DSIRE) Glossary
Electric Power Markets: National Overview Federal Energy Regulatory Commission 2017 Interactive Map
GHG Emissions Calculator EPA 2017 Tool
Green Power Supply Options EPA GPP 2018 Website
IREC Glossary Interstate Renewable Energy Council (IREC) Glossary
Pathways to 100: An Energy Supply Transformation Primer for US Cities Meister Consultants Group / Cadmus 2017 Report
Policies and Incentives by State Database of State Incentives for Renewables & Efficiency (DSIRE) Interactive Map
Project Sunroof Google 2018 Tool
Renewable Energy Procurement: A Guide to Buying Off-site Renewable Energy Melbourne Renewable Energy Project/City of Melbourne 2017 Report
SEIA Solar State-by-State Factsheets Solar Energy Industries Association Q3 2018 Interactive Map
SLED (State and Local Energy Data) Department of Energy 2018 Database
Solar Power Purchase Agreements: A Toolkit for Local Governments IREC (Interstate Renewable Energy Council) 2015 Templates
State-by-State Map of Energy Choice in the U.S American Coalition of Competitive Energy Suppliers Interactive Map
U.S. EIA Glossary U.S. Energy Information Administration Glossary
Wholesale Electricity and Natural Gas Market Data U.S. Energy Information Administration 2019 Database
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