Power Purchase Agreement

A Power Purchase Agreement (PPA) is a legal contract between an electricity generator and a purchaser of energy or capacity (power or ancillary services). Such agreements play a key role in the financing of electricity generating assets. Under the terms of a PPA, the PPA provider typically assumes the risks and responsibilities of ownership when it purchases, operates, and maintains the turn-key facility. By clearly defining the output of a generating asset and the credit of its associated revenue streams, a PPA can be used by the owner of the asset to raise non-recourse financing [ [http://financial-dictionary.thefreedictionary.com/Non-Recourse+Finance Non-Recourse Finance financial definition of Non-Recourse Finance. Non-Recourse Finance finance term by the Free Online Dictionary ] ] from a bank or other financing counterparty. [ [http://financial-dictionary.thefreedictionary.com/counterparty Counterparty financial definition of Counterparty. Counterparty finance term by the Free Online Dictionary ] ] [ [http://www.people.hbs.edu/besty/projfinportal/glossary.htm#P Glossary] ]

Commercial PPA Providers such as [http://www.sunedison.com/ SunEdison] , [http://www.mmarenewableventures.com/ MMA Renewable Ventures] , [http://www.solarpowerpartners.com/ Solar Power Partners] , and [http://www.recurrentenergy.com/ Recurrent Energy] are enabling businesses, schools, governments, and utilities to benefit from predictable, renewable energy through a PPA.

Other Solar Electricity Providers include SunRun, [http://www.solarcity.com/ Solar City] , [http://www.tiogaenergy.com/ Tioga Energy] .

ee also

*Nonrecourse debt
*Project finance
*Structured finance

References