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Power Purchase Agreement (PPA) | Solar Services Agreement (SSA)
Overview

PPA/SSA Defined:

A creative commercial solar financing mechanism that takes the form of a contract to purchase solar energy (kWh) or the services to obtain solar energy from the owner of the solar energy system (usually a special purpose entity/LLC) to the consumer of the power (offtaker/customer).

COMPONENTS OF A CONTRACT

LENGTH

Typically a contract is 20-25 years, with the option to buy-out after year 6 (additional terms can apply)

Typically a contract is 20-30 years, with the option to terminate (buy-out) after year 6 (additional terms can apply).

PAYMENT TERMS

How often the special purpose entity (SPE) will be paid, the penalty for non-payment, dealing with disputes, taxes, etc..

PROJECT CONSTRUCTION

Information on a reasonable timeline and materials expectations for completion of construction.

PRICING

Amount paid (or rate) for the electricity to be paid by the offtaker/customer to the special purpose entity (SPE)/LLC over the length of the contract. This can often include escalation rates, which match or are less than historical increases in utility electricity rates.

The rate (amount paid) for the electricity to be delivered to the offtaker/customer by the SPE over the length of the contract. This often includes escalation rates, which are usually less than historical increases in utility electricity rates.

SYSTEM INFORMATION

This includes size, location, anticipated first-year production, description, modules, inverters, and utility provider.

BENEFITS OF A PPA | SSA

PPA/SSA
Leasing
Buying

Little to No Upfront Capital

No Performance Risk

No System Expertise Required

No Maintenance Required

No Purchase Required

STRUCTURE OF A PPA | SSA

 

ADDITIONAL INFORMATION