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A PPA is a contract between two parties, one who produces or generates power for sale (the seller) and one who seeks to purchase power (the offtaker). This contract is sometimes referred to as an offtaker agreement.

POWER PURCHASE AGREEMENT IS A CAPITAL ASSET.

What is a Power Purchase Agreement? A Power Purchase Agreement (PPA) is an arrangement in which a third-party developer installs, owns, and operates an energy system on a customer's property. The customer then purchases the system's electric output for a predetermined period.

The main difference between solar leases and PPAs is what you pay. In a solar lease, you pay a fixed monthly rate for the use of the solar panels. In a solar PPA, you pay a fixed rate per kWh of energy consumed from the solar panels.

If these contracts are settled net in cash or another financial instrument, they may have to be accounted for as financial instruments – in most instances, as derivatives – unless they were entered into by the entity for purposes of its own electricity usage requirements.

In a power purchase agreement, just like any other contract, there are usually two parties involved, the buyer and the seller. This leads to the possibility of default on one of the parties' ends. In order to mitigate such a risk, the agreement should have set provisions on non-compliances for a quick resolution.

Physical PPAs, which are usually 10- to 20-year agreements, define all the commercial terms for the sale of renewable electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination.

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© Copyright 1997-2025
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Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232