The PPA relationship is unique in that your business doesn’t own the system, but you reap the full benefits of the electricity it generates. Northlands Energy will purchase, possess, and maintain the solar panels, batteries, inverters, and performance monitoring systems. Your business will only pay for the electricity that it consumes.

That means your business gets greener, cheap electricity without having to worry about buying equipment or maintaining it.

1. Electricity Generation Details: The PPA specifies the quantity and type of electricity to be generated by the power plant. It includes details such as the maximum and minimum capacity of the plant, the expected energy output, and the technical specifications of the generating facility.

2. Duration and Term: The PPA specifies the duration of the agreement, typically ranging from 10 to 25 years. It defines the start date and end date of the contract, providing a long-term commitment for the power generator to sell electricity and for the purchaser to buy it.

3. Pricing Structure: The PPA outlines the pricing structure for the electricity purchased. It may include fixed prices, variable prices, or a combination of both. Fixed prices provide stability and predictability, while variable prices may be based on market conditions or other agreed-upon parameters.

4. Payment Terms: The PPA defines the payment terms, including the frequency of payments, invoicing procedures, and acceptable methods of payment. It may also outline any penalties or incentives related to payment delays or early payments.

5. Performance Guarantees: The PPA often includes performance guarantees, ensuring that the power generator meets certain operational standards and commitments. This may include provisions for the availability of the power plant, the reliability of electricity supply, and the quality of the generated power.

6. Grid Connection and Interconnection: The PPA addresses the requirements and responsibilities for connecting the power plant to the electricity grid. It covers aspects such as grid access, transmission infrastructure, interconnection procedures, and any associated costs or liabilities.

7. Environmental and Regulatory Compliance: The PPA typically includes provisions related to environmental and regulatory compliance. It may outline the power generator’s obligations to meet environmental standards, obtain necessary permits and licenses, and comply with applicable laws and regulations.

8. Force Majeure and Termination: The PPA includes provisions for force majeure events, which are unforeseen circumstances that may impact the ability to generate or purchase electricity. It also defines the conditions under which either party can terminate the agreement, such as in case of breach, insolvency, or regulatory changes.

9. Dispute Resolution: The PPA may establish mechanisms for resolving disputes that may arise between the power generator and the purchaser. This may include arbitration or other alternative dispute resolution processes to avoid lengthy and costly litigation.

10. Governing Law and Jurisdiction: The PPA specifies the governing law and the jurisdiction under which any legal disputes will be resolved. It helps provide clarity and consistency in interpreting and enforcing the agreement.

1. No Upfront Costs: One of the primary advantages of a PPA is that it requires little to no upfront capital investment. The solar project developer or the third-party financier owns and installs the solar panels on the consumer’s property, assuming the upfront costs. This allows the consumer to adopt solar energy without the need for a significant initial investment.

2. Cost Predictability: Under a PPA, the consumer agrees to purchase the electricity generated by the solar panels at a predetermined price per kilowatt-hour (kWh) over the contract term. This provides cost predictability and shields the consumer from fluctuating electricity prices, which can be volatile in certain markets. It allows for better budgeting and financial planning.

3. Savings on Electricity Bills: By entering into a PPA, the consumer typically pays a lower price for solar electricity compared to their current utility rates. This results in immediate savings on electricity bills, offering a cost-effective alternative to traditional grid electricity. The consumer benefits from the lower-priced solar energy without the need to invest in and maintain the solar system.

4. Third-Party Ownership and Maintenance: In a PPA, the solar project developer or the financier retains ownership of the solar system and is responsible for its maintenance, monitoring, and repairs. This relieves the consumer of the burden of system upkeep, including the costs and complexities associated with maintenance, warranties, and performance monitoring.

5. Environmental Benefits: By utilizing solar energy through a PPA, consumers contribute to a cleaner and more sustainable energy future. Solar power reduces reliance on fossil fuels and helps mitigate greenhouse gas emissions. This aligns with corporate social responsibility goals and can enhance the consumer’s reputation as an environmentally conscious organization.

6. Long-Term Agreement and Stability: A PPA typically spans a long-term agreement, often ranging from 10 to 25 years. This long-term commitment provides stability and ensures a predictable supply of solar electricity for the consumer. It also provides assurance to the project developer or financier, facilitating their return on investment over an extended period.

7. Flexibility and Scalability: PPA structures offer flexibility to consumers, allowing them to tailor the agreement to their specific energy needs. Consumers can choose the amount of electricity to be supplied by the solar system based on their consumption patterns. Additionally, PPAs can accommodate future energy demands by incorporating scalability options, enabling consumers to expand their solar capacity as required.

8. Financial and Tax Benefits: Depending on the local regulations and tax incentives, the solar project developer or financier may be eligible for tax credits, rebates, or other financial incentives associated with renewable energy projects. These benefits can be passed on to the consumer in the form of reduced electricity prices or additional savings.