Power Purchase Agreements (PPAs)
For public sector partners, the up-front investment required to design and install a solar system has historically been cost prohibitive. But Power Purchase Agreements (PPAs) have changed that dynamic significantly, and are an essential tool in ensuring that schools, local governments, and non-profits have the ability to save money by embracing solar.
What is a PPA?
Broadly, PPAs are a simple agreement: a producer (Sun Tribe) agrees to sell energy to a consumer (that’s you) at an agreed-upon price for a set period of time (generally 20-30 years) from a solar system we install on-site. We design, install, own, and maintain the system at absolutely no cost to you, and the entire project is financed by private sector partners, who are able to take advantage of solar tax credits which are not available to public sector entities (for a summary of tax credits and solar, click here).
PPAs vary on a state-by-state basis, but looking at a single state can be instructive. In Virginia (home to Sun Tribe’s Headquarters), the Power Purchase Agreement program was established by the General Assembly in 2013 with the goal of encouraging private sector investment in public sector solar, as county administrators, school superintendents, and non-profit leaders were increasingly looking for ways to meet established sustainability goals. In Virginia, PPAs are completely 0 cost for customers – even removing the solar system at the end of the agreed-upon term is handled by Sun Tribe, and PPA customers often see significant savings; it’s not uncommon to see millions of dollars in savings over the course of the agreement. We only use a PPA with clients when we can save them money.
It’s worth noting: a PPA is not the only option for public sector partners looking to solar as an energy solution – you’re still able to purchase a system outright, if that’s your preference. But the truth is that PPAs often make the most financial sense for the public and non-profit sectors, and help them fulfill their missions while lowering their energy bills. Simply put, the PPA program is all about access, and lets Sun Tribe work with partners whose primary objective is financial savings at a time of shrinking budgets and increased financial oversight.
The power of a PPA is that it brings the public and private sector together through a shared set of incentives, and enables Sun Tribe use to provide the absolute best value for schools, governments, and non-profits. It provides energy bill savings without any costs – the best of all possible worlds.
At Sun Tribe, we’re proud to be a leader in providing PPAs for the public sector. Have a question about how PPAs can help save you money? Send us a note and one of our resident experts will reply with an answer.
How Schools are Using PPAs to Save Money
Middlesex County Public Schools is a national leader in providing educational opportunities while being good stewards of community resources. Working closely with Sun Tribe, Middlesex County Public Schools installed the first ground-mounted solar system at any school in Virginia and will be the first school district in the Commonwealth to have its schools 100 percent powered by on-site renewable energy. All while saving $4.74 million for taxpayers.