Power Purchase Agreement: How It Works

Описание: A power purchase agreement is a long-term contract between an electricity generator and an electricity consumer.

A power purchase agreement (PPA) is like a long-term subscription service for electricity.

Just like you might subscribe to a streaming service like Netflix to watch movies and shows, a PPA allows a buyer (like a utility) to subscribe to a renewable energy project (like a solar farm) for a fixed period, usually 10-25 years.

The buyer agrees to purchase a certain amount of electricity from the renewable energy project at a predetermined electricity price for the duration of the agreement.

This provides the project developer with a guaranteed revenue stream, which helps them secure financing to build the project,
while the buyer gets access to renewable energy at a predictable cost.

#powerpurchaseagreement #ppa

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