Power Purchase Agreement (PPA)

Power Purchase Agreement (PPA)

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a legal contract between an electricity generator (provider) and purchaser (buyer, typically a commercial or industrial business, government entity, utility, or other large power buyer/trader).

Pros

PPA contracts are widely available and understood.

Cons

It's easy for undereducated consumers to sign a non-beneficial agreement with long-term impacts of 25+ years.

Real Talk

PPAs have been pivotal in growing RE by shifting project investment risk away from the end user of energy. However, as RE risks and costs decrease, consumer education is needed to make PACE or normal debt financing a more common financing choice.

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