Power Purchase Agreement
A Power Purchase Agreement is an agreement between two parties – an investor in solar development and a host site that agrees to purchase the energy at a reduced rate. Any good candidate is an organization that is interested in renewable energy but may not have the capital to invest in a system. Some might call this a “free solar system” and others might say “this sounds too good to be true.”
Well, it’s true and here are the details.
Host site must have a large roof surface area or adjacent available land
A developer will provide the needed capital to fund the project as well as support the ongoing maintenance needed for system uptime.
The developer will retain the financial benefits from the Federal Tax Credit and Illinois SREC incentives.
In exchange for providing a host site and a long-term investment opportunity for the developer, the client will receive their energy at a reduced rate.
Little to no upfront investment for the host client and limited risk.
Reduction in electricity rates for the contracted term.
If your organization (school, non-profit, or government agency) is unable to qualify for the 30% Federal Tax Credit, PPA’s can provide much needed financial leverage.
Long-term budget control and financial focus to core business operations.
Environmental benefits by reducing a large carbon footprint.
Marketing opportunities to eco-conscious suppliers and customers.
Ability to maintain ownership of systems at the end of the PPA term at little to no cost.