Power Purchase Agreement Contract Structure for Solar Power Systems

Contractual matters of interest

  • DC output size of the PV modules in kWh
  • AC or U.S. Power Test Condition (PTC) output of the photovoltaic modules in kWh
  • Expected AC power output of the solar system in its first year of installation
  • Expected life cycle power output in kWh DC
  • Expected life cycle power output in kWh AC
  • Guaranteed minimum annual power output performance in kWh AC
  • Terms of contractual agreement
  • Penalty or compensation for performance failure
  • Price structure at the end of the contract with client paying 0% of the cost
  • Price structure at the end of the contract with client paying 50% of the cost
  • Price structure at the end of the contract with client paying 100% of the cost
  • Expected average yearly performance during life cycle of the contract
  • Expected mean yearly performance degradation during life cycle of the contract
  • Assumed PPA price per kWh of electrical energy
  • Initial cost of power purchase agreement
  • PPA yearly escalation cost as a percentage of the initial energy rate
  • Net present value over 25 years
  • Proposed cost reduction measures
  • Net present value of reduction measures
  • Annual inflation rate
  • Projected annual electricity cost escalation
  • First year avoided energy cost savings
  • Total life cycle energy saved in kWh
  • Total life cycle energy PPA payment
  • Cost of PPA buyout at the end of life cycle
  • PPA expenses
  • Total life cycle pretax savings
  • Total project completion time in months
  • Customer training
  • Insurance rating

Technical matters of interest

  • PV module manufacturer and type PV module technology
  • PV module efficiency rating
  • PV module DC Watts
  • PV module PTC Watts as listed under California Energy Commission (CEC) equipment and product qualification listing
  • Total PV module count
  • Percent yearly solar power output degradation
  • PV module warranty in years after formal test acceptance and commissioning
  • Inverter make and model as listed under CEC equipment and product qualification
  • Inverter kilowatt rating
  • Number of inverters used
  • Inverter performance efficiency
  • Inverter basic and extended warrantees
  • Solar power tracking system (if used)
  • Tracking system tilt angle in degrees east and west
  • Number of solar power tracker assemblies
  • Kilowatts of PV modules per tracker
  • Ground or pedestal area requirement per 100 kW of tracker; for large solar power farms, tracker footprint must be accounted for in acres per megawatt of land required
  • Tracker or support pedestal ground penetration requirements
  • Tracker above ground footing height
  • Tracker below ground footing height
  • Wind shear withstand capability in miles per hour
  • Environmental impact during and after system installation (if applicable)
  • Lightning protection scheme
  • Electrical power conversion and transformation scheme and equipment platform requirements
  • Equipment mounting platforms
  • Underground or above ground DC or AC conduit installations
  • PV module washing options, such as permanent water pressure bibs, automatic sprinklers, or mobile pressure washers
  • Service options and maintenance during life cycle of the PPA

Experience in large-scale installation

  • Engineering staff’s collective experience in photovoltaic design and power engineering
  • In-house or subcontracted engineering
  • In-house or subcontracted installation crew
  • Years of experience in solar power tracker system type installations (if applicable)
  • Years of collective experience in PPA contracting
  • Location of management, engineering, installation, and maintenance depots
  • Availability of PV modules and specific power purchase agreements with major national and international manufacturers
  • Name of the primary entity assuming full contractual responsibility and project bonding
  • Names of each contractor or subcontractor taking part in the PPA
  • Years of collaboration with outsourced entities
  • Data acquisition and monitoring system
  • Data acquisition and control system (DACS) certification by the rebate agency, such as the California Solar Initiative (CSI)
  • Data acquisition system has a proprietary provider or a third party certified provider?
  • DACS power measurement and transmission intervals in minutes
  • Monitored data, such as weather, wind speed, humidity, precipitation, and solar irradiance
  • CSI certified reporting scheme
  • Customer WEB access key
  • On site electrical display and printing capability, and associated options
  • On site integration capability with customer’s data monitoring system
  • Periodic data reporting format and frequency
  • Presentation and visual aids, such as bar chart displays of statistical solar power monitored information and solar power array configuration displays
  • On demand reporting
  • Proactive solar power system diagnostic capability

What to prepare for Power Purchase Agreement (PPA)

Advantages and disadvantages of Power Purchase Agreements



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