A PPA, or Power Purchase Agreement, is a financial arrangement commonly used in the renewable energy industry, including solar power. PPAs are contracts between a developer (often a solar energy company) and a customer (often a business or institution) for the purchase of electricity generated by a solar power system. Here's how it typically works:

Solar Installation: The solar developer installs a solar panel system on the customer's property or at a nearby location.

Electricity Generation: The solar panels generate electricity from sunlight.
Purchase Agreement: The customer agrees to buy the electricity generated by the solar panels at a predetermined price per kilowatt-hour (kWh). This price is often lower than what the customer would pay for electricity from the grid.

Long-Term Contract: PPAs are typically long-term contracts, often spanning 10 to 25 years. During this time, the customer benefits from lower electricity costs, and the developer generates revenue from selling the electricity.
Benefits of PPAs for customers:

Lower Electricity Costs: Customers can often secure a stable, lower electricity rate compared to traditional utility rates.
Green Energy: It allows customers to support renewable energy and reduce their carbon footprint.

No Upfront Costs: In many cases, the customer doesn't need to invest in the solar installation; instead, they pay for the electricity produced.
Hedging Against Price Volatility: PPAs can protect against potential future increases in electricity prices.
Benefits for developers:

Steady Revenue: Developers have a guaranteed income stream over the contract period.

Access to Capital: PPAs can make it easier for developers to secure financing for solar projects.

Reduced Risk: Developers often assume some of the operational and maintenance responsibilities, reducing risk for the customer.
It's worth noting that the specific terms of a PPA can vary widely depending on the agreement between the parties, local regulations, and the financial structure of the project. Additionally, the availability and terms of PPAs can change over time as the solar industry evolves and as government incentives and policies shift.

If you are considering a solar PPA then Contact us for more details.