Project Purpose

To bring long-term electricity generation online to power municipal operations and advance the City’s goals of transitioning to 100% renewable electricity and providing budget stability for the City. 

Project Overview

In October 2019, the City of Philadelphia signed a power purchase agreement (PPA) for the 70-megawatt (MW) Adams Solar project in Adams County, Pennsylvania, a project expected to generate enough electricity to power more than 17,000 homes annually. This project represented a major step toward the City’s clean energy goals and was one of the largest municipal solar procurements in the commonwealth.  

Adams Solar came online when the project started operations in 2024, delivering electricity and associated renewable energy certificates (RECs) for the City of Philadelphia. The completion of this project brings the City’s overall renewable electricity purchases for municipal operations to 30%. From March 2024 through February 2026, this project helped the City avoid $1.26 million in electricity costs compared to its non-Adams Solar electricity supply purchases, demonstrating early success in achieving the PPA’s goal of delivering savings and long-term stability relative to market electricity prices. 

How does this project fit into Philadelphia’s broader climate and energy goals?

Philadelphia’s PPA strategy is a central component of its broader Municipal Energy Master Plan, which includes goals to reduce carbon emissions, lower energy use, and transition to 100% renewable electricity for municipal facilities.

The City has set targets to reduce municipal built environment emissions by 50%, lower building energy use by 20%, and transition to 100% renewable electricity by 2030, while maintaining or reducing operating costs. The City views PPAs as the primary pathway to achieving its renewable electricity goal because Philadelphia’s dense urban environment limits the amount of renewable electricity that can be supplied realistically through onsite solar alone. Utility-scale PPAs allow the City to procure renewable electricity at a scale that would be difficult to achieve within City limits while benefiting from the lower costs associated with large-scale renewable energy developments. 

How is Philadelphia using PPAs to reduce risk and avoid price volatility?

Managing Electricity Price Volatility

Philadelphia views PPAs as a long-term hedge against rising electricity cost and market volatility. Through its partnership with the Philadelphia Energy Authority, the City can purchase renewable energy at a fixed price over a long contract period, providing greater budget certainty and reducing exposure to fluctuating energy market prices. 

To support this strategy, the City’s Office of Sustainability worked with consultants to evaluate how contract pricing would perform over time using forward market projections and analysis factors such as regional electricity demand, basis risk, settlement location risk, REC markets, and delivery-zone differences. The PPA was designed to help stabilize long-term energy costs while supporting the City’s renewable energy goals. 

Diversifying Risk through a Portfolio Approach

Philadelphia has also taken a portfolio approach, viewing Adams Solar as the first step in a broader renewable electricity procurement strategy rather than a one-time purchase. Since then, the City has added a second utility-scale PPA through itsAbes Run Solar project, located in Clearfield County, Pennsylvania, along with ongoing REC purchases (described later in this case study). This strategy allows the City to diversify risk and adapt to changing market conditions — without putting all its eggs in one basket. 

Reducing Operational and Project Risk

The City also views PPAs as a way to reduce operational risk. Since the developer owns, operates, and maintains the project, Philadelphia does not need to manage specialized equipment, maintenance schedules, equipment replacement, or long-term system performance. City staff noted that this structure is particularly valuable given limited staff capacity and competing operational priorities. Additionally, by locking in electricity prices through a long-term contract, the City is able to hedge against future electricity price volatility over a longer time horizon, providing greater cost certainty and creating the potential for long-term cost savings.

Philadelphia collaborated with technical consultants to review pricing proposals, generation forecasts, congestion risks, and project delivery assumptions. City staff noted that external expertise was particularly valuable when evaluating complex proposals and comparing long-term project risks. 

What were Philadelphia’s biggest challenges?

Procurement and Contracting Complexity

Developing and executing utility-scale PPAs requires significant time and internal capacity. Because the City was an early actor in purchasing renewable electricity in Pennsylvania, the procurement process for energy projects — developing solicitations, evaluating bids, negotiating contracts, and managing stakeholders — was novel compared to other procurements and proved to be one of the most resource-intensive aspects of the project. 

Municipal procurement requirements add further complexity. Under City rules, contracts are generally limited to one year with up to four one-year renewals. This means the City would need to issue a new Request for Proposal (RFP) at least every five years if it relied on traditional service contracts. According to City staff, the process of developing an RFP, evaluating proposals, selecting a vendor, and finalizing contracts can take six to nine months, making frequent procurements both time- and resource-intensive. In addition, this contracting framework poses potential risks for the project developer. Shorter contracts limit stability, whereas a longer-term contract generally presents a more attractive overall investment. As a result, the reduced stability associated with shorter contracts can translate into higher PPA prices.

To help address these constraints, long-term PPAs are executed through municipal authorities, in this case, using the Philadelphia Energy Authority (PEA), creating a three-party contracting process between the City, PEA, and the developer. While this structure adds  complexity and requires additional coordination and approvals, it enables Philadelphia to pursue long-term renewable energy contracts that would otherwise be difficult to execute through the City’s traditional procurement processes.

Evaluating Different Approaches for RECs

Philadelphia identified defining REC contract terms as a key challenge during contract development. During a contract renegotiation in 2020, the Adams Solar project shifted from delivering project-specific RECs to a Green-e certified REC swap while maintaining the original contract price. The change was necessary to keep the project moving after pandemic-related supply chain disruptions affected the original developer and the replacement developer determined that the project could not be financed if the City retained the project-specific RECs. Under this arrangement, the City receives certified renewable energy certificates through a market transaction rather than directly from the solar project. City staff explained that Green-e certification helps ensure RECs are properly tracked, retired, and not double counted, while allowing the City to continue meeting its broader carbon-reduction goals.

City staff noted that REC swaps were less common at the time, making it difficult to clearly define certification requirements and contract language. Additional contract amendments were later required to ensure the City received the intended Green-e certified RECs. Despite these changes, City staff noted that the agreement remained cost-competitive and continues to provide value today. 

Participation in Local Workforce Development

Another lesson learned involved workforce development. Philadelphia successfully incorporated workforce development provisions into the Adams Solar procurement, offering solar installation training opportunities for Philadelphia residents. Given the travel distance, however, City staff found that providing workforce opportunities at a solar project located several hours from Philadelphia created participation challenges for Philadelphia residents.   Workforce development remains an important goal of projects, and the City continues to incorporate workforce training opportunities within clean energy projects located within Philadelphia.

What advice would Philadelphia offer to other cities?

Start Early and Track Project Performance

Philadelphia highlighted the value of starting early and tracking project performance over time. By comparing the  Adams Solar contract price established in 2018 with actual market electricity prices in 2024 and beyond, the City has been able to evaluate how the project is performing relative to expectations. Demonstrating the cost savings and performance data strengthens the City’s ability to communicate the value of renewable energy procurement to internal partners, such as Law, Finance, and others, whose support is necessary to invest in these types of projects, and helps to build support for future projects. Philadelphia also observed that market conditions have evolved since Adams Solar was procured in 2018, making it more challenging to secure the same level of cost competitiveness for subsequent projects. Together, these experiences reinforced the importance of starting early rather than waiting for ideal market conditions. 

Engage Finance and Budget Stakeholders Early

The City noted that earlier engagement with finance and budget stakeholders could help streamline future procurements by building a shared understanding around how PPAs can function as long-term price hedges. Because PPAs are often designed to provide savings over time versus immediate savings, decision-makers may not immediately see the full value in the project. Philadelphia found it helpful to use historical price comparisons, long-term financial modeling, and projected future electricity costs to demonstrate the long-term value of fixed-price electricity contracts. 

Clarify REC Structures Early

Philadelphia recommends prioritizing clearer REC-related contract language in future PPAs. Because Adams Solar used a Green-e certified REC swap structure, the City identified the need for greater clarity around how renewable electricity claims are verified and accounted for over the life of the agreement.

Leverage Peer Experiences and Technical Expertise

Philadelphia emphasized the importance of leveraging peer city experiences and technical assistance throughout the procurement process. Lessons learned from other municipalities informed procurement design and vendor evaluation criteria.

Beyond Adams Solar: Philadelphia’s Expanding Renewable Electricity Portfolio?

Philadelphia has continued to expand its renewable electricity portfolio beyond Adams Solar. In 2025, the City announced a second utility-scale PPA for the 20-MW Abes Run Solar project, expected to come online in early  2027. Abes Run Solar is projected to supply approximately 5% of municipal electricity demand under a 20-year fixed price PPA. Unlike Adams Solar’s Green-e certified REC swap structure, the City expects to receive the RECs associated directly with Abes Run Solar. 

The City reports its renewable electricity progress as part of a broader portfolio approach that currently totals approximately 30% renewable electricity purchases (including REC purchases). While Adams Solar currently supplies approximately 19% of municipal electricity load, the 30% figure reflects the City’s broader renewable electricity portfolio by including the City’s REC purchases made in addition to Adams Solar. 

By combining long-term PPAs with broader energy management strategies, Philadelphia has advanced its climate goals while managing energy costs. The City’s approach also demonstrates how municipal leadership can help catalyze renewable energy procurement across a region. Philadelphia’s climate leadership efforts have helped spur renewable energy procurement across other major institutions in the region. For example, the Southeastern Pennsylvania Transportation Authority (SEPTA) signed a long-term power purchase agreement for two solar projects totaling 43.8 MW, expected to supply nearly 20% of its annual electricity demand. Similarly, the University of Pennsylvania executed a 220 MW solar PPA that resulted in the largest solar project in Pennsylvania, now supplying the equivalent of approximately 70% of the electricity demand of Penn’s academic campus and health system. Together, these projects demonstrate how cities and anchor institutions can expand the market for large-scale renewable energy procurement through early action and long-term purchasing commitments. 

Additional Information and Resources

• Public Bids – Philadelphia Energy Authority
• Philadelphia Reaches for the Sun, Finalizes Agreement for City’s Second Utility-Scale Solar Project – Philadelphia  Energy Authority
• Adams Solar Project Is Complete, Supplies 25% of Municipal Electricity Demand | Division of Energy and Climate  Solutions | City of Philadelphia
• City Moves Forward with Large-Scale Purchase of Renewable Energy | Office of Sustainability | City of  Philadelphia