THE PPA TERMS
1- Term
Base term with one or more extensions option.
The term may vary from 10 to 20 years.
2- Effective Date
The PPA becomes binding from the date it is signed.
This ensures that the purchaser will buy the output once the project is built and that the project owner will build the project and not sell its output to anyone other than the purchaser.
3- Commercial Operation Date
The term usually begins on the commercial operation date and extends for a specified number of years.
The commercial operation date can effectively be the date on which the installation is “finished” except for relatively minor punch-list items.
4- Contract Rate
The rate is fixed for the duration of the agreement with an escalation clause reflecting inflation and the projected rise of electricity from utilities.
The rate is designed to create significant savings for the consumer over the duration of the agreement.
5- Environmental Attributes
The environmental attributes will attach and be available to the solar power project during the term of the PPA.
The PPA usually states the energy is sold without the environmental attributes.
The sale of Renewable Energy Certificates is the prerogative of the owner of the system unless the PPA states otherwise.
If the host wishes to retain the right to the environmental attributes, the seller will warrant title to the attributes but will not warrant the current or future use, character, or value of the attributes, or whether and to what extent they will be recognized by law.
6- Permitting & Development
The PPA will include a clause for permitting, status reports, milestones and possible damages for delays.
7- Interconnection
The PPA usually requires the seller to bear the cost of interconnection.
8- Operation & Maintenance
The PPA outlines the seller’s responsibility to operate and maintain the project in accordance with prudent operating practices. Such duties include regular inspection and repair, as well as completion of scheduled maintenance.
The PPA also provides for access to the project.
9- Net Metering
Metering is most important as it determines the quantity of output for which the seller is paid.
Under Arizona law, net metering allows the consumer to receive credits for excess electricity produced.
The PPA assigns those credits to the seller.
10- Billing & Payment
The PPA determines how invoices are prepared, when they are issued, and how quickly they are paid.
The PPA sets forth procedures for raising and resolving billing disputes, and the interest rate and penalties that apply to late payments
