v     What is a Power Purchase Agreement (PPA)? 

Ø      A power purchase agreement is a long-term legal contract to buy power – solar electric, solar thermal, geothermal or wave energy from a company (micro-utility) that produces energy.  These companies are often referred to as Solar Power Partners (SPP), Solar Thermal Partners (STP), Geothermal Partners (GTP) or Wave Energy Partners (WEP).  The Partners play a key role in assuming most, if not all of the risks and responsibilities of ownership, operation and maintenance of the turn-key power generating system.  

Ø      Customers run their business as usual, without the high cost of ownership, maintenance and the headaches of managing a renewable energy system, while benefiting from the use of “Green Energy”, while hedging against inflationary energy spikes. 

v     How Do Power Purchase Agreements Work?

Ø      Commercial PPA Providers purchase, install, monitor and maintain the systems on behalf of the customer.  The commercial customer typically has zero (-0-) out-of-pocket cost.  Instead, the Commercial PPA Provider provides the energy (electric or thermal) a customer uses and bills the customer monthly, just like a local utility, but at a reduced rate over a 10-20-year period.

Ø      Most Agreements are custom in nature.  They vary depending on the size of the systems, location, local city, state and federal rebates, credit rating of the customer and the cost and energy the system is capable of producing.

v     What Are the Terms of a Power Purchase Agreement? 

Ø      Most Agreements encompass a 20-year term, some maybe as little as 10 or 15-years.

Ø      The Commercial PPA Provider usually provides a 5-20% initial energy cost reduction.  Then, the rates either stay fixed over a set period of time, then adjust or the rates adjust annually according to some form of index (Energy/Consumer Price Index).

v     What Size Systems are Written with a Power Purchase Agreement?

Ø      Solar Electric – 30KW+ (50,000kWh Annual)

Ø      Solar Thermal – 75-Panel System+ (10,000-therms Annual)

Ø      Geothermal – 50-tons+ (600,000-btuh)    

v     What Are the Advantages of Power Purchase Agreements? 

Ø      No Up-front Capital Outlay                       

Ø      Reduced Energy Costs

Ø      Hedge Against Volatile Energy Prices

Ø      Capitalize on “Green Marketing Value”

Ø      Only Pay for Power Produced (Net Energy vs. Gross Energy)

v     Who Offers Power Purchase Agreements?

Ø      The majors, including SunEdison and Solar Power Partners, but Precise Renewable Energy has 4 or 5 partners to shop your deal.  We are not beholden to one partner and thus, we are very competitive.

In summary:  Ask us to design, build and install your renewable energy system.  And negotiate a competitive power purchase agreement on your behalf.  We work for you and not the Power Purchase Partner!