Power Purchase Agreement (PPA)

A Power Purchase Agreement (PPA) is a contractual arrangement between an electricity generator, typically a renewable energy provider, and a purchaser, often a utility or large energy consumer. In this agreement, the generator commits to supplying a specified amount of electricity at a predetermined price for a defined term. The PPA outlines the terms of electricity delivery, pricing structures, and the duration of the contract, providing a stable revenue stream for the generator and predictable energy costs for the purchaser.

PPAs are instrumental in facilitating the development of renewable energy projects by providing financial certainty and risk mitigation. They often include clauses related to performance guarantees, energy output, and maintenance responsibilities. This long-term agreement helps investors secure financing for projects by ensuring that a reliable income source will cover operational costs and loan repayments, thereby promoting the growth of sustainable energy infrastructure.

For buyers, a PPA offers the advantage of fixed or indexed pricing, which can help manage energy costs and hedge against market fluctuations. Additionally, purchasing power from renewable sources can enhance corporate sustainability profiles and meet regulatory or environmental goals. Overall, a PPA is a vital tool in advancing the deployment of clean energy while ensuring financial and operational stability for both parties involved.

At Sunfinity, we are committed to providing energy solutions that are as clean as the wind—safe, renewable, and environmentally friendly.

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