
Chapter 6
Development: Energy off-take
and power purchase agreements
Jesse Tippett
6.1 THE PPA AND ITS IMPORTANCE TO FINANCE
AND VALUATION
Power purchase agreements (PPA) are one of the most instrumental and sought after
milestones in a renewable energy project’s development. This agreement makes or
breaks the viability of a project; the financial difference between the value of a project
with or without a PPA is paramount. A PPA is a binding contract between an electric
utility and a project developer. In a solar PPA the utility commits to buy renewable
electric power from the developer’s solar generator over a long period of time, typi-
cally ...