Power Purchase Agreements
What is a Power Purchase Agreement and what does it include?
A No-CapEx On-Site Decarbonization Solution
Residential and Commercial customers can secure a rooftop or ground mount solar project with ease through a Power Purchase Agreement (PPA). A PPA is a perfect solution for a homeowner or commercial real estate owner seeking to decarbonize and lower thei energy costs with zero investment or financing required, and results in a building performance upgrade that can immediately reduce energy expenses by 20%+.
Full System Operations & Maintenance Coverage
Under a PPA, a homeowner or commercial real estate owner is paired with a financier who becomes the asset owner of your solar project, who will include a full operations and maintenance package with the contracted PPA rate for the system's operating life. This includes 24/7/365 monitoring, damage claims and emergency shutdown requirements, ensuring a seamless solar integration for a busy homeowner, property manager or real estate portfolio owner.
Buyout Options, Extension Periods, and Decommissioning
After the majority of incentives are captured by the asset owner, the PPA financier may offer a buyout option at Fair Market Value. Additionally, at the end of the PPA Term, if the system's performance life outlast the contract term, an extension period may be offered, at an increased rate. Finally, when the system has reached the end of its operating life, decommissioning is conducted and fully covered by the asset owner under the PPA Agreement.
Power Purchase Agreement Frequently Asked Questions
What are the risks associated with signing a Power Purchase Agreement?
The biggest risk of signing a power purchase agreement for the energy customer are signing with a provider that is not well-financed. A reputable PPA financier typically has $100M+ in project financing available, or at least has a track record of connecting customers with a financier in their network who does if a project size is above their appetite. Clean Earth Renewables only works with leading PPA financiers across the country, with project financing and capital commitments of $2B+, guaranteeing the lowest cost of capital for its energy customers.
How can I qualify for a Power Purchase Agreement?
PPA customers are typically property owners with over 25,000 square feet+ of available roof or land space, and typically pay $5,000+ per month on electricity. PPA customers prefer to lock in long-term savings rather than investing out of pocket for a commercial solar project. If you meet this criteria, you may be an excellent candidate for a PPA. Some property owners are uncertain if they should invest or sign a PPA, and Clean Earth will help property owners weight the benefits of each option, and provide professional advice on the best route for each project.
Are there any costs associated with a Power Purchase Agreement?
A Power Purchase Agreements allows organizations to leverage their strong financial worthiness to secure an all-inclusive, long-term fixed kWh rate, typically far below the market price. A reputable PPA financier will start the customer with signing a letter of intent, followed by a PPA Contract. By working with CER, the entire cost of engineering, procurement, construction, and maintenance are accounted for within the PPA rate provided.
I signed for a price in an LOI but at the time of signing the contract, my price went up. Why?
There are many factors associated with a PPA rate offered in the LOI vs. the formal PPA contract. A reputable PPA provider will explain to the customer that all pricing in the LOI is subject to all final engineering, equipment, labor, and construction costs. This means that a rate in the LOI is not guaranteed, but is the best estimate until financial underwriting, engineering, procurement and construction budgets are final. It is in everyone's best interest to work promptly to executing and providing all documentation necessary including historical energy usage, financials and property ownership credentials to the PPA provider to ensure the LOI-to-Contract period is swift and as accurate as possible.
Is maintenance included?
Maintenance is provided under the PPA contract, and the EPC is typically contracted to perform the O&M during the entire contract term.
Is there an option to buyout the contract and own the system?
Yes - but you are precisely doing just that - buying out the contract through a lump sum of the remaining payments after a certain milestone year, typically after 5-7 years of the contract term.