A Purchaser’s Guide To Solar PPAs
For solar projects that are not owned by utilities or the final customer, developers must determine to whom they shall sell their electricity. They can either opt for selling directly into wholesale markets or under a long-term contract, which is also known as Power Purchase Agreements (PPAs). On the whole, corporations represent a big part of the electricity load, which puts them in an exceptional position, allowing them to leverage their buying power to shape the future blueprint of the grid- a grid that supplies all with clean and affordable power.
However, the market needs to create and implement a vigorous risk mitigation toolkit in order to achieve that future. The nuances of PPA risk assessment and mitigation can make for an intricate task for the buyers to manage on their own. Buyers should plan in advance with the awareness that an effective PPA configuration is of crucial importance and make sure that they make informed decisions fitting their risk appetite. This insight paper is intended to serve as a compass to help buyers circumnavigate the most common risks associated with power purchase agreements.