The Power Purchase Agreement (PC for Solar) 95
electricity system oversight to an already overloaded list of issues to deal
with for their core business.
TYPICAL PPA TERMS
Zero Upfront Cost
15- 20 year PPA Agreement
This is the term during which you will be required to purchase all
electricity generated by the solar system. PPA providers realize that solar
electricity systems will last decades. They are willing to purchase the sys-
tem to own, operate, and maintain over 15-20+ years while traditional fi-
nancing is for only a third to half that time frame. The result is that many
PPA agreements can be cash flow positive from the start, which means
the price you will pay for solar power is actually less than you would pay
for traditional electricity from the utility. Keep in mind that when enter-
ing a PPA you will still receive power from the utility company to provide
electricity when solar is not able to provide all of your electricity needs, as
may be the case with night or heavy power usage facilities.
Starting kWh Price
Depending on the location of the solar installation, size of the proj-
ect, and other parameters affecting power production, a PPA will have a
specific kWh starting price.
Figure 5-2