[RE-wrenches] Sample Power Purchase Agreements

[Matt Lafferty]

Hi Carl,
 
Actual PPA contracts are rather complex instruments. To start with, the PPA
is actually a contract between the PPA Provider/System Owner (think of this
as the "bank") and the Host Customer. These are the parties that will have
the enduring relationship because, under a PPA, the Host Customer pays the
System Owner for the electricity generated for many years. A 3rd party
integrator (I'm guessing that's your role) doesn't generally end up with a
direct contractual relationship with the Host Customer. Basically, you end
up working for the System Owner and maybe getting a "finder's fee". In some
cases, the PPA provider will pay you a finder's fee and have their preferred
installer(s) do it. It's also common for the integrator to never see the
actual PPA contract that gets executed either way. 
 
Each PPA provider has their own requirements and standard contracts. Some
offer "buy-outs" and some don't. Some offer both. Some offer longer terms
than others. Some have severe "early termination" clauses and some don't.
Some "pay for" or "credit back" environmental credits and some just take
them and say that's why their rate is as low as it is if asked. Etc. The
requirements vary by state as well. This is an extremely short list of the
many variables that go into the structure and costs of a PPA. They aren't
exactly generic, if you know what I mean.
 
I know it sounds like a good idea to show them a sample, and in principle it
is. If you have to do this, I suggest that you find a PPA provider(s) that
you want to do business with and will feel good about leaving the non-profit
in their hands, first. Get a sample from them. It will have their
boilerplate in it, which is what you really want to show the customer.
 
It gets really sticky later when they call you up during the negotiations
(which you aren't involved in unless you have a consulting arrangement) and
they ask you why the contract they are being asked to sign is so much
different than the sample you originally showed them. I've seen numerous
deals fall apart for reasons just like this. Simple matter of trust. The
Host Customer ends up feeling like they can't trust anybody involved and
ends up not going solar at that time.
 
An alternative is to contact a public agency in your neck of the woods who
has signed up for one of these and see if you can get a copy of theirs.
Freedom of information and all.... Beware of this route for the reasons
stated above, but at least it's easier to explain because they are a
government agency, yada yada yada.
 
No matter what sample you show them, make sure you are clear that it's ONLY
A SAMPLE and the final version WILL be different. Depending on what you show
them and who they end up dealing with as a PPA provider, the differences can
be huge.
 
Best of luck!
 
$02001,
 
Matt Lafferty
gilligan06 at gmail.com
 
 
 > I'm interested in sample PPAs.  I'd like to set one of these up for a
local non-profit customer and would appreciate any examples, etc you are
willing to share

With REgards
Carl Adams
NABCEP Certified Installer 
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