POWER PURCHASE AGREEMENT (PPA)
The Solar Power Purchase Agreement (SPPA) is an alternative to financing and owning the system. It offers you an opportunity to install solar or wind power at your facility without paying upfront costs or worrying about system operation and maintenance. Sometimes referred to as a “third party” ownership model, this approach lets you focus on your core mission, while solar experts manage your energy system. For 15 to 20 years, you enjoy predictable, pre-set electricity prices, and power from a solar system that is a source of pride for your organization.
PPA TERMS
Disclaimer: this document is only intended to illustrate a possible scenario. A wide range of variables can and will alter the possible outcomes. All terms are fully negotiable.
The Parties
Buyer is the purchaser of electricity
Seller is the seller of electricity, i.e. a limited partnership owned by GLOBAL SOLARIS GROUP
A base term is established with one or more extensions options.The term may vary from 15 to 20 years.
The PPA becomes binding from the date it is signed.
The PPA term starts from the “commercial operation” date also called “placed in service” date.
The PPA will include an obligation from the project owner to install and test the system. It will also set a “placed in service” date that relates to when the sale of electricity becomes active.
The rate is fixed for the duration of the agreement with an escalation clause reflecting inflation. The rate is designed to create lifecycle savings for the consumer by targeting an increase rate that is less than from utilities.The PPA starting rate is usually set at a discount from the rate paid to the electric utility company.The contract price is based on the amount of electricity generated by the project.
The environmental attributes will attach and be available to the seller during the term of the PPA.The PPA states the energy is sold without the environmental attributes. The sale of Renewable Energy Certificates is the prerogative of the owner of the system.
The PPA requires the seller to bear the cost of interconnection.
The PPA outlines the seller’s responsibility to operate and maintain the project in accordance with prudent operating practices. Such duties include regular inspection and repair, as well as completion of scheduled maintenance.The PPA also provides for access to the project.
Metering is most important as it determines the quantity of output for which the seller is paid.Under Arizona law, net metering allows the consumer to receive credits for excess electricity produced.The PPA assigns those credits to the buyer.
Timing: During the PPA purchase options can be exercised only from 6 years after “commercial operation” date up to the end of the term.
Pricing: Pricing is established at fair market value and a discounted present value of the electricity produced by the system for the remainder of its useful life.
The PPA determines how invoices are prepared, when they are issued, and how quickly they are paid.The PPA sets forth procedures for raising and resolving billing disputes, and the interest rate and penalties that apply to late payments.
GLOBAL SOLARIS GROUP
100 Carol Canyon Dr., Sedona, AZ 86336
1-415-497 6324
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