Solar PPA’s (Power Purchase Agreements)
Solar PPA’s (Power Purchase Agreement) are a long-term agreement to buy solar power from a third party that owns the solar system producing the electricity. Solar PPA’s serve as an attractive alternative to purchasing a system because there is no upfront investment or ongoing maintenance required. In essence, a user (tenant or building occupant) agrees to pay a set rate for a set term for the electricity generated by the solar system. The solar system is owned by a third party who takes advantage of the tax credits and other state or federal incentives. At the end of the PPA term, the solar energy system can be purchased at fair market value or the PPA can be renewed on favorable terms.
A well structured PPA allows you to reduce your electricity costs immediately and realize increased savings over time as electricity rates rise.
Advantages of BrighterPPA
- $0 upfront costs, we make the upfront investment
- No need to worry about the system, we fully maintain and insure the system
- You only pay for what your system produces
- Fix your energy costs for the term of your PPA
- Term: PPA’s typically require a 10 yr minimum term but are more typically 15-20 years.
- Rate: The rate is the price per kwh the user pays. We structure all of our PPA’s so the customer saves money compared to what they would otherwise pay the utility company.
- Escalator: Most PPA’s contain a 1-2% annual escalator to keep up with inflation. Keep in mind, utility rates have increased an average of 5% each year over the past ten years.
These are the main deal terms but this page provides more details on PPA deal terms.