Anatomy of a Power Purchase Agreement

Hi Eric,
I would have liked to see some credit given to the County of Santa Clara and Silicon Valley Joint Venture for taking the leadership to take up this monumental endeaver.  Thank you.
Siva

SunEdison is in there, Jigar. Maybe you need to get back on the panel circuit. :)

For years it’s been the wild, wild west of solar PPA’s. I applaud solar tech for attempting to create a benchmark of sorts, but like solar PV, one size/standard may not fit all.

Also, commercial endeavors have lawyers and MBAs to work out their PPA’s, but consumers do not. Because PPAs can be so complex, I do believe there should be some kind objective government regulation for the residential markets.  Consumers need to be well educated to finance solar, and the fine print of PPAs can be daunting. In addition, few residential customers know about PACE alternatives, let alone the value of RECs today or in the future, tax benefits, possible FiTs, and the fair market value (FMV) of those used panels. Clear education about these factors (not a fine print check box) could help consumers to make an educated financial decision, rather than a short term no-up front money decision.

Please don’t misunderstand me. I strongly believe residential PPAs and leases are a very important part to wider solar adoption, However, as this article notes for mainly commercial systems, the contracts and the marketing should be as transparent and as easy to understand as possible.

Download “Customer’s Guide to Solar PPAs” for free at CaliforniaSolarCenter.org (courtesy of Sunedison, Solar Power Partners, and MMA, and Rahus Institute.)
RETScreen has free PPA templates and you can download actual contracts from California DGS website.
And, I agree with Solar Fred. It’s ‘customer beware’ in the residential PPA and lease market. Ramp up the consumer education programs!

Dumb question: Do residential customers sign PPA documents, and can that be negotiated? Or at the this level of the distributed segment, it is just a standard process?

I have long wanted to see the forensics of a PPA and did not have enough magic to find one - though I looked (SCE - still waiting for your call backs)?

As an evolutionary movement in energy we have been focusing on shovels to find gold and that is important, but where to dig seems more to be the PPA question.

Sunetric is also trying to do their part in Hawaii. In a recent real-life example, Sunetric Capital joined with the Lighthouse Outreach Church in a power purchase agreement. A solar array was installed on top of the church at Sunetric’s expense, and the electricity which is now being produced will be sold back to the church at a rate which is (and will continue to be) considerably lower than HECO. Current tax laws make this an even more attractive arrangement, because as a nonprofit, Lighthouse Outreach was unable to take advantage of the current tax incentives for installing renewable energy systems. As a for-profit company, Sunetric Capital can take advantage of those incentives and pass the savings along to the church.  For for information on PPA’s, check out http://www.sunetric.com

Hard to come up with a standard “national” PPA contract when electricity production/distribution is still regulated by individual state agencies and utilities set their own interconnection standards and limits on accepting distributed generation.  Many don’t even have the intelligence in their grids to deal with large peak loads being fed back from their customer base so they reduce baseline   Throw in state RECs, FITs, tax incentives and production credits which are all over the map.  Bottom line: a comprehensive renewable energy strategy is too important to leave to state discretion.  National RPS/Interconect and FIT standards need to be created to develop and drive this huge new market, and a “Big Stick” of carbon tax needs to be imposed to fund it.  Republicans will call this ‘big government’ but the countries who are far surpassing us in renewable adoption and CLEAN JOBS have NATIONAL laws driving the change. The solar and wind industries need lobbyists, as the coal/oil companies have had for decades, to promote the vision of an American energy policy that works wherever you are located.  A national strategy built our road and highway system, and the renewable revolution will have to be as large in scope as the WPA.

Need to watch CSI.  Not much anatomy here.