Gaining Solar Advantages Via a Power Purchase Agreement
- By Ellen Kollie
- April 1st, 2011
Sedona administrators were fortunate to have bond money to invest in their solar equipment and program. Not all school districts can afford to do the same. For those districts, there is a Power Purchase Agreement (PPA).
With a PPA, a third-party, such as Borrego Solar, with locations throughout California and in the North East, owns the equipment in a developer role, and sells the solar power to the school district. The power is sold to the district at a set, reduced rate for a specified period of time. At the end of the contract, the district owns the system in its entirety. “That’s the trend right now in Arizona,” says Kinney Construction’s Michael Thomas, LEED-AP, “and probably in the Southwest, simply because districts don’t have the money to pay for it upfront.”
“It’s a good program for school districts,” says Mike Hall, Borrego’s CEO, “because they don’t have to come up with the capital, and they don’t have to put themselves at risk for the technology performing. They simply pay for the energy that’s used.” In addition to serving as a PPA, Borrego also serves as a solar designer, installer and financier.