PPA’s explained: what is a power purchase agreement?
A power purchase agreement (PPA) is a common contract in the renewable energy space, but many smaller businesses with renewable production capacity aren’t aware that they can make use of these agreements to generate additional income for their business.
Today we will discuss what PPAs are, and how businesses with renewable capacity can leverage them to gain income.
What is a power purchase agreement (PPA)?
A power purchase agreement in the broadest terms is a contractual agreement between an energy buyer and an energy seller. The two parties agree to buy and sell a specific amount of energy which has either been generated or will be generated by a renewable source. These contracts are usually long-term, often lasting upwards of a decade.
Why are they used so often with renewable projects?
A PPA enables a renewable installation to guarantee a certain amount of revenue, reducing the risk both from volatile energy markets and potential fluctuations in production. Having one in place can also help with securing funding for renewable projects, providing a guarantee to a lender that the project will produce some money.
What does this mean for businesses?
Businesses are increasingly installing renewable resources of their own, such as solar panels or small wind turbines to power their operations. What some businesses may not realise is that by using a power purchase agreement, they can sell any excess energy their installation produces, usually to the National Grid.
Apertus Group are well placed to help businesses negotiate PPAs for their renewable energy installations. Our expert energy consultants know how to get the right negotiated price for the installation, ensuring that the business’s energy needs are fulfilled in a cost-effective way.
Apertus Group can also assist you with installation projects. Find out more on our installation pages about our free digital assessments and unique quoting process today.
