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Power Purchase Agreement
Define energy supply, pricing, and responsibilities between buyers and producers with this Power Purchase Agreement Template.
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Power Purchase Agreement Template
This Power Purchase Agreement (“Agreement”) is entered into on [Date], by and between:
Seller (Producer): [Company Name]
Address: [Address]
Contact Information: [Phone, Email]
and
Buyer (Purchaser): [Company Name]
Address: [Address]
Contact Information: [Phone, Email]
Together referred to as the “Parties.”
1. Purpose
The Seller agrees to sell, and the Buyer agrees to purchase, electricity generated from [describe facility type, e.g., solar, wind, hydro] located at [Facility Location].
2. Term
Start Date: [Start Date]
End Date: [End Date]
Renewal: [Automatic renewal/Option to extend].
3. Energy Supply and Delivery
Capacity: [MW or kWh per month/year].
Delivery Point: [Specify grid connection or delivery location].
Scheduling: [Detail how electricity is scheduled and dispatched].
4. Pricing and Payment
Price Structure: [Fixed price per kWh / Variable tied to market index / Hybrid].
Billing Cycle: [Monthly/Quarterly].
Late Payment Fee: [Specify amount or interest rate].
Price Adjustments: [Escalation clauses, inflation adjustments, or renegotiation terms].
5. Performance Guarantees
The Seller guarantees that the Facility will maintain a minimum availability of [X%]. Failure to meet this threshold may result in penalties or credits to the Buyer.
6. Metering and Measurement
Electricity delivered shall be measured at the Delivery Point by calibrated meters, maintained in accordance with industry standards. Meter data will be shared with both Parties.
7. Environmental Attributes and Credits
The Seller assigns any renewable energy certificates (RECs) or environmental credits associated with the electricity sold under this Agreement to the [Buyer/Seller], unless otherwise specified.
8. Force Majeure
Neither Party shall be liable for failure to perform obligations due to events beyond reasonable control, including natural disasters, strikes, or government actions.
9. Default and Remedies
Events of Default: [Non-payment, failure to deliver, failure to purchase].
Remedies: [Termination rights, damages, or liquidated damages].
10. Termination
This Agreement may be terminated early by:
Mutual agreement of the Parties.
Buyer default in payment obligations.
Seller failure to deliver electricity for [X days/months].
11. Governing Law
This Agreement shall be governed by the laws of [State/Country].
12. Entire Agreement
This Agreement represents the full and complete understanding between the Parties and supersedes prior negotiations or written communications.
Signatures
Seller: ___________________________ Date: _________
Name/Title: [Authorized Representative]
Buyer: ___________________________ Date: _________
Name/Title: [Authorized Representative]
Details
Learn more about
Power Purchase Agreement
POWER PURCHASE AGREEMENT FAQ
What is a Power Purchase Agreement?
A Power Purchase Agreement (PPA) is a contract between an electricity generator (such as a renewable energy company) and a buyer (often a utility or business) that defines how much energy will be supplied, at what price, and for how long.
Why is a Power Purchase Agreement important?
It provides price stability, ensures predictable revenue for producers, and helps buyers secure reliable energy at agreed rates. PPAs also support renewable energy projects by giving financiers long-term revenue certainty.
When should you use a Power Purchase Agreement?
Use a PPA when developing or purchasing energy from renewable sources such as solar, wind, or hydro projects, or when negotiating long-term energy supply agreements with utilities or private companies.
What should a Power Purchase Agreement include?
It should include details on energy quantity, pricing structure (fixed, variable, or hybrid), delivery method, project timeline, performance guarantees, penalties for non-delivery, and termination rights.
Who typically enters into a Power Purchase Agreement?
Utilities, corporations seeking renewable energy commitments, government agencies, and independent power producers often enter into PPAs. Both small-scale projects and large utility-scale developments rely on them.
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