Clients can build out and rapidly expand a renewable portfolio with no upfront expenditure by entering into a power purchase agreement (PPA).
Freedom Energy has vetted developers and generation facilities and has extensive experience executing PPAs for a full range of renewable projects in the commercial and municipal space. Along with our qualifying partners, we audit and evaluate any facility suited for a PPA to assess savings and the environmental impact, and work with clients to achieve your renewable goals and sustainability initiatives.
What is a solar PPA?
It is a financial agreement where a developer arranges for the design, permitting, financing, and installation of a solar system. The PPA defines all the commercial terms for the sale of power between two parties (buyer and seller), and includes when the project will begin commercial operation, delivery schedule, penalties for under delivery, and termination. The developer sells the power generated to the client at a fixed rate that is typically lower than the local utility rate. The lower price serves to offset the client’s purchase of electricity from the grid while the developer receives income from the sale of electricity as well as any tax credits and other incentives generated from the system.
PPAs typically range from 10-25 years and the developer remains responsible for system operation and maintenance for the duration of the agreement.
Benefits of Solar PPAs include:
- No or low upfront costs.
- Reduces energy costs. Solar PPAs provide a fixed, predictable cost of electricity for the duration of the contract.
- There is limited risk. The developer is responsible for the solar assets including system performance and operational risk.
- Developers can typically utilize available tax credits to reduce system costs.
- Potential increase in property value.