A power purchase agreement is between a buyer and a developer. It is usually a long-term contract that offers financial certainty to the buyer and the developer, removing primary roadblocks in building renewable facilities.
Agreement Between:
[Developer.FirstName] [Developer.LastName] [Developer.Country] owning a registered office at [Developer.Company] [Developer.StreetAddress]
[Buyer.FirstName] [Buyer.LastName] [Buyer.Country] with an office located on [Buyer.Company] [Buyer.StreetAddress] . Both Buyer/Client and Developer may be considered as “Party” and together as “Parties” on the date of the Agreement [Document.CreatedDate] .
The Developer confirms to complete the entire construction and commissioning of their Project The Developer confirms to sell the energy output from the Project to the BuyerBuyer wishes to buy the energy generated according to the terms and conditions presented in the Agreement
Now, Therefore, the Parties intend to be legally bound to all the conditions, warranties, and representations mentioned in this Agreement. These clauses are as follows:
The interpretation of expressions and terms in this Agreement are according to the meanings provided in Schedule A.
Terms not mentioned in this schedule shall have the same meaning as mentioned in the Oxford dictionary.
Further, the heading of all the paragraphs mentioned are majorly for convenience only, and in case of a conflict, the context of the paragraph should be considered.
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Terms such as Buyer is the client in this Agreement. Similarly, the Developer is the purchaser. This information shall be mentioned and interpreted as given in the schedule.
It should also include the meaning of terms such as project, government, metering system, net energy output, and relevant consents.
One of the schedules that you may attach to this power purchase agreement template is the timeframe of when the project will begin. It should also outline the schedule of delivery of electricity and the amount of electricity the developer will supply.
In accordance with this Agreement's provisions and terms and conditions, the Developer will sell the net energy output to the Buyer.
Subject to all terms and conditions of the Agreement, the Buyer should purchase capacity and energy from the Developer on the basis of the prevailing tariff.
The amount due for the net energy output is in accordance with the rules mentioned in the payment section.
Solar power purchase agreements are long-term contracts that typically range from 10 to 25 years. When defining your term, you need to be clear about the commencement date and the termination date of this agreement. You may also include what happens after the term is finished.
The initial term of the Agreement would commence on the Agreement’s date. Both parties can agree to change the length of the Agreement's term as per their needs.Any of the Parties can extend the tenure of the Agreement as per the agreed renewal terms as agreed by both Developer and Buyer.
In SPPA, the developer handles designing and installing the solar energy system. They also bear most, if not all, of the cost of this installation. Communicate the installation duration to the client with clear development milestones and pricing. You may also add this as a schedule to the agreement.
All payments and money received should be calculated in the Agreement’s agreed currency. The invoice shared by the Buyer must feature detailed calculations highlighting any amounts owed.A special invoice should be generated in case of a breach or default. This should cover all the amounts owed and details on any payment delays.
A Developer should be obliged to finish the Project’s construction and should also conduct the prescribed operations.
The Developer is responsible for maintaining all licenses, approvals, and permits demanded by local agencies.
The Developer shall be obliged to obtain tax credits, loans, or grants from public and private institutions.
The Buyer should own and maintain the Metering System with performance measurements to calculate the payments made to the Developer.
The Parties should be responsible for testing and inspecting all the Metering Equipment.SPPAs offer two primary metering systems: interconnected systems and net metering, with regulations varying by state. If you want to determine which option is best for your agreement, consult with a local environmental lawyer.
One party warrants the other that each party is duly formed and under the excellent standing of the law of [Developer.Country] and is qualified to conduct business in (country of the Project) by complying with all the laws.
Unless stated otherwise, the Developer shall own, design, and construct the Project under the Agreement's laws, regulations, and rules.
Buyer agrees to pay for the net energy output mentioned in the AgreemIn this solar power purchase agreement sample, it is recommended to specify the types of insurance required by each party. Buyers should consider solar panel property insurance, while developers should explore solar contractor insurance, solar panel production insurance, solar installation floater insurance, and performance warranty insurance as relevant options to be outlined.
All the insurance related to the Project should be maintained by both Parties involved.In case of any dispute related to the Agreement, both Parties shall resolve the issue within 30 days through mutual discussion.
If a dispute doesn’t resolve, it should be settled through arbitration.All the notices shared should be in writing and must be either delivered by post or handed over in person.
All the notices should have the party’s address, fax number, and telephone in detail. Notices are only effective upon their receipt or delivery.All the amendments in this Agreement shall be binding when provided in writing and signed by the representatives of both Parties involved.
Each party should keep all related documents confidential and not publish them publicly.All the obligations and rights of the parties involved in this Agreement shall be constructed and governed as per the laws of the (governing country).
In Witness Whereof, this Agreement has been executed on the date, month, and year mentioned above.
The list of provisions mentioned above isn’t exhaustive. Both parties can include as many clauses as possible to reduce any chances of dispute later.
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The most significant difference between a solar lease and a power purchase agreement is how the amount you pay is calculated. In a solar lease, you pay a fixed monthly rate and receive an unlimited amount of energy. Alternatively, in a power purchase agreement, you pay a fixed rate per kWh of the energy you use. As such, the final monthly amount can vary depending on the amount of energy consumed.
A power purchase agreement enables customers to receive low-cost and stable electricity without any upfront cost. The agreement also benefits the owner of the purchased solar system to earn tax credits and generate income from electricity sales.
Here’s how this agreement works:
This Agreement can be comprehensive, depending on the requirements of the buyer and purchaser. However, there are a few imperative things that must be a part of this purchase agreement.
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