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The PPA is often regarded as the central document in the development of independent electricity generating assets (power plants), and is a key to obtaining project financing for the project.

Under the PPA model, the PPA provider would secure funding for the project, maintain and monitor the energy production, and sell the electricity to the host at a contractual price for the term of the contract. The term of a PPA generally lasts between 5 and 25 years. In some renewable energy contracts, the host has the option to purchase the generating equipment from the PPA provider at the end of the term, may renew the contract with different terms, or can request that the equipment be removed.

One of the key benefits of the PPA is that by clearly defining the output of the generating assets (such as a solar electric system) and the credit of its associated revenue streams, a PPA can be used by the PPA provider to raise non-recourse financing from a bank or other financing counterparty.

Commercial PPA providers can enable businesses, schools, governments, and utilities to benefit from predictable, renewable energy.

In the United States, the solar power purchase agreement (SPPA) depends heavily on the existence of the solar investment tax credit, which was extended for eight years under the Emergency Economic Stabilization Act of 2008. The SPPA relies on financing partners with a tax appetite who can benefit from the federal tax credit. Typically, the investor and the solar services provider create a special purpose entity that owns the solar equipment. The solar services provider finances, designs, installs, monitors, and maintains the project. As a result, solar installations are easier for customers to afford because they do not have to pay upfront costs for equipment and installation. Instead, customers pay only for the electricity the system generates. With the passage of the American Recovery and Reinvestment Act of 2009 the solar investment tax credit can be combined with tax exempt financing, significantly reducing the capital required to develop a solar project. Moreover, in certain circumstances the federal government will provide a cash grant in lieu of an investment tax credit where a financing partner with a tax appetite is not available.

Reference: Wikipedia, The Free Enclopedia

With New Jersey Solar Electric on your side you are assured a worry free PPA installation.
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For a company or an organization, going with a Power Purchase Agreement (PPA) is the quickest way into the use of Solar Power without a heavy capital expenditure. This path allows you to concentrate your finances in the direction that benefits you most while achieving a fifty percent (50%) reduction on your electricity expenses. Residential customers benefit equally as well as in commercial applications with a PPA type of arrangement. A high minimum amount loan requirement on solar leases also makes PPA financing more suitable to residential solar installations.

At NJ Solar Electric, we offer PPA as an alternative as opposed to an outright purchase of a Solar PV System. So what does the process entail for a company or residential to go with a Solar PPA? Well for one we need the rights to be able to install on a given location. After that, NJ Solar Electric takes care of everything from assessing, designing, engineering, financing, and installation. Once a PPA is signed, just like a customer purchased solar power system, we assign a project manager to the installation and then obtain regulatory certifications along with rebates and incentives. The only difference between a client paid and a PPA installation is: on a PPA installation, the investor and/or its assigns owns and assumes responsibility for maintaining, monitoring the equipment, and assuming peak system efficiency. There is zero cash outlay involved for the customer, and it now becomes in the interest of the owner of the PPA installed solar power system to make sure that their investment in this cash cow, to put it bluntly continuously produces profitable electricity during its long lifespan. With NJ Solar Electric as the system integrator, financing is taken care of for the customer. We arrange a solar installation based on a Power Purchase Agreement with an investment firm that underwrites the financing. You, the customer then no longer has to worry about any performance or maintenance issues while paying a 50% discount on electricity. It is all done automatically by the solar PV system owner. Solar PPA's are financed through debt and tax equity by investors who benefit from various federal and state incentives and tax benefits. When these solar power benefits are efficiently provided to third party investors, PPA providers like NJ Solar Electric are able to translate the associated lower capital costs into lower-cost solar electricity to its customers.

Solar PPA's are an excellent way to go solar. Whether you are a residential, commercial, or non-profit organization it is a win-win situation for all involved. You the customer get a 50% discount on your electric bill. The investor that finances this arrangement gets the benefit of being able to depreciate quicker than the norm due to government incentives. Investors then quickly achieve positive cash flow with little risk. On the other hand, managers, designers, installers, and maintenance providers of a solar power system also share in the benefit of a PPA as they are paid to design, build, and maintain a solar installation. For non-profit organizations that cannot take advantage of tax credits, the reduction in their energy payments is like newly found revenue stream that can be put to immediate good use. PPA's can be transferred to the owner of the installation site according to the contract terms.

When it comes to helping our environment, Solar Power Purchase Agreements even makes more sense. And NJ Solar Electric is there for you every step of the way!
Solar Power Purchase Agreement
A Solar PPA lets you procure a Solar Installation Without Cost