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What is a power purchase agreement?

Lisa Curtis
posted this on November 19, 2012 03:11 pm

In a power purchase agreement, or “PPA”, the solar installer designs, constructs, and sells the system to a project owner who has obtained financing for the acquisition by monetizing the tax benefits and future cash flows. The project owner then sells the power generated by the system to the solar customer for a contracted price and term under a PPA. As a result, the solar customer will purchase the electricity generated at a contracted price, typically on a monthly basis over a fifteen to twenty year period.
 
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