Photovoltaic Energy Storage Cooperation Agreement

What is a solar power purchase agreement (PPA)?

PPAs are an easy way for governments to “go solar” without needing to use their own upfront capital funds and without the responsibility of managing solar project construction, ownership, and operation. PPAs can be cash flow positive from day one (Better Buildings Finance Navigator: Power Purchase Agreement).

How do I prepare for a PPA or self-ownership of solar?

To prepare for a PPA or self-ownership of solar (or solar + battery storage) project, EECBG Program awardees will need to identify government departments that should be consulted about solar installation projects, such as facilities/public works; finance; legal; procurement; sustainability; and economic development.

Are solar PPAs viable?

Solar PPAs are also viable when the solar project is not located on a government property, but the government receives the delivered electricity output. These so-called “Off-site” PPAs are popular with large energy users with insufficient space to host large solar arrays. A PPA is typically 15 to 30 years long.

Should a solar project include battery storage?

In either a PPA or self-ownership, solar projects that also include battery storage are more complicated than solar-only projects since they need to carefully establish rules for how and when the battery is used. EECBG Program awardees interested in this option, should review the plans early with their local utility.

Can a PPA be used for a solar project?

EECBG Program awardees interested in this option, should review the plans early with their local utility. Whether the government chooses a PPA or to own the solar project itself, the federal renewable electricity incentives in the Inflation Reduction Act (IRA) can still be applied to the project.

Which states allow third party PPAs for solar PV?

Any government could use the self-ownership contract structure, while a subset also has the PPA option. According to the North Carolina Clean Energy Technology Center’s Database of State Incentive for Renewables and Efficiency (DSIRE), at least 29 states (and District of Columbia and Puerto Rico) authorize or allow third party PPAs for Solar PV.