Power Purchase Agreements vs. Purchasing

The Power Purchase Agreement (PPA) is not advantageous for companies.  The PPA is a wise legal contract for utilities to use as their tried-and-proven mechanism to buy energy from merchant plants during peak periods for their customers’ power demands. When utilities need more power, the mostly deregulated utilities’ industry uses the PPA to develop new generation assets owned by third party energy developers.  These third-party facilities are referred to as merchant plants.   However, the PPA is a poor choice for renewable energy projects of 10 megawatts or less that distribute this power to one or a few facilities.   This is always the case with solar energy technology owned and operated by its user(s).  This can also be the case with some Residential Real Estate Development.

With a PPA, the facility owner effectively switches its utility company by paying a steady rate of return acceptable even by Wall Street standards.  This sounds like selling energy to customers is a very profitable proposition, which it obviously is!  PPA agreements are not a wise investment for distributed energy assets.  PPAs are for merchant power plants.

Let Solar Hawk Energy™ show you how significantly the Opportunity Cost varies in the tens of thousands between a PPA and normal utility rates over 25 years. Then, let Solar Hawk Energy™ show you the real measure of Opportunity Cost is in the millions of dollars and has at least a 25% Internal Rate of Return.*

*For Arizona companies*