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Power Purchase Agreements

At a Glance

Power purchase agreements feature a variety of benefits and considerations for Federal agencies, including:

Benefits:

  • No up-front capital costs
  • Ability to monetize tax incentives
  • Typically a known, long-term energy price
  • No operations and maintenance responsibilities
  • Minimal risk to the agency

Considerations:

  • Federal sector experience with PPAs is still growing
  • Contract term limitations
  • Inherent transaction costs
  • Challenges with site access contracts and concerns

Power purchase agreements (PPAs) allow Federal agencies to finance on-site renewable energy projects with no up-front capital costs incurred.

With a PPA, a developer installs a renewable energy system on agency property under an agreement that the agency will purchase the power generated by the system. The agency pays for the system through these power payments over the life of the contract. After installation, the developer owns, operates, and maintains the system for the life of the contract.

Project Information

FEMP outlines the power purchase agreement process in its Alternative Finance Options (AFO) webinar. Dates and times are posted to the FEMP events calendar.

The PPA portion of this presentation is available, featuring typical PPA processes, benefits, challenges, and several case studies (PDF 1.1 MB). Download Acrobat Reader.

Several PPA sample documents are available. Available resources include sample requests for proposal, contracts, land use agreements, case studies, and more.

Project Assistance

FEMP offers technical assistance to Federal agencies interested in implementing PPA projects through renewable energy experts at the National Renewable Energy Laboratory (NREL) and other U.S. Department of Energy (DOE) national laboratories.

These experts often facilitate cooperation between a Federal agency and the Western Area Power Administration (Western) or the Defense Energy Support Center (DESC). DESC features a Renewable Energy Initiatives team, while Western has authority to sign longer-term contracts for Federal agencies in its service territory.

For additional information, contact:

Tracy Logan
Federal Energy Management Program
202-586-9973
tracy.logan@ee.doe.gov

Chandra Shah
National Renewable Energy Laboratory
303-384-7557
chandra.shah@nrel.gov