Nutshell: What is a Power Purchase Agreement?

Power Purchase Agreements, often referred to as PPAs, are contractual agreements between a renewable energy developer and a buyer.

The renewable energy developer is an organisation specialising in the installation of solar or wind sites. An example of this is Anglia Solar (www.angliasolar.co.uk)

The buyer is a body, organisation or company which contracts to take and use the green energy generated from the site.

Therefore the specific details of the contract between the two parties means that under a PPA agreement, the developer agrees to generate electricity from a renewable energy source and sell it to the buyer at an agreed-upon rate for a set period of time.

It is highly advantageous that the user of the energy knows for an extended period of time that the purchase price per kWh is set and will not increase until the contract ends; a period which can be 10 or 20 years.

In a nutshell the buyer is able to secure a long-term supply of clean energy at a fixed price, providing stability and predictability for energy costs.

Further, PPAs have become increasingly popular in recent years as businesses and organisations seek to reduce their carbon footprint and meet sustainability goals without the need for high Capital Expenditure.

For more information contact: power purchase agreement | Anglia Solar

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