Power Purchase Agreement / Host a Solar System
A solar Power Purchase Agreement (PPA) enables a business to purchase lower-priced electricity produced by a solar electric system without having to purchase the system outright.
Here's how a PPA works: an investor (or investor group) owns the solar system, but the business owner hosts the system on its property. The host agrees to purchase the electricity produced by the system at a predictable rate (which will be lower and less inflationary than utility rates).
Benefits to Investor:
- Monthly electricity payment from the host
- Investment Tax Credits
- Depreciation tax benefits
- Revenue from SREC incentives offered by the federal and state governments
Benefits to Host:
- No Capital Investment - The investor provides the capital to purchase the solar system.
- Hedge Against Price Inflation - Obtain a long term contract for electricity at a predictable price.
- Avoid System Responsibility - The investor is responsible for the design, construction, maintenance, repairs, and operation of the solar system.
- Corporate Acceptance - A long term power purchase agreement may be more acceptable to a company's management, directors, and stockholders.
- Public Relations Benefits - Hosting a solar system demonstrates sensitivity to the environment and to the health and welfare of employees and community.
- Decrease the Business's Carbon Footprint - Utilizing solar power will immediately reduce your emissions of CO2 caused by the burning of fossil fuels