Power Purchase Agreements: Tips and Tricks Part 2

In Part 1 of this series we introduced you to Power Purchasing Agreements (PPA’s), which are contracts for purchasing electricity generated by a power plant that take advantage of federal tax incentives to lower electricity costs. PPA’s are used to develop and deliver energy from renewable sources.

As noted by Windustry.org, key provisions in a PPA include, among others, the following:

1. Term

PPA’s are long term commitments that generally range from fifteen (15) to twenty-five (25) years. However, early termination rights may be negotiated for numerous reasons, including (a) tax credits are not available, (b) regulatory approvals or permits do not issue, (c) lack of financing or power transmission access, etc.

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