Power Purchase Agreement (PPA)
A power purchase agreement, a buying structure for purchasing renewable energy, is a straightforward and effective way that an organization can procure renewable energy in a large amount. Power purchase agreements include both sleeved PPAs and Virtual PPAs. Both allow for the delivery of renewable energy amounts that meet sustainable energy requirements or commitments.
Sleeved PPAs
When working with a sleeved PPA, there is an intermediary utility company that is responsible for the handling of both the transfer of energy and money. Sleeving is a term applicable to the action of transferring the energy through an intermediate retailer, in this case a utility company. Working on behalf of the buyer, the utility company facilitates the transfer of both the money and energy to and from the renewable energy project. The utility company is responsible for the directing of energy from the renewable energy project and sleeving it to the buyer.
There are a number of benefits of sleeved or direct agreements. Particularly if the buyer is not comfortable in his or her knowledge about the market dynamics, a sleeved PPA reduces any level of risk. In a sleeved PPA the utility company is responsible for bearing any risk in fluctuations of the wholesale power market price.
In times that renewable energy is not readily available in amounts needed, the buyer is not responsible for the purchasing of balancing power.
The buyer does pay a sleeving fee to the utility company that is responsible for acting as the intermediary between the generator of the renewable energy and the consumer.
By Julia Armstrong
Diagram from Norton Rose Fulbright:
What Our Customers Are Saying
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David delivers! A true professional that talks at any level in discussing complex systems. David staff is knowledgeable about the product and is efficient installer. I would highly recommend them. David's team delivers!
Chris S, Batavia, NY -
I thought that this would be a good investment towards my retirement. The time will never be better do to solar energy the federal government provides tax credit and I would not hesitate to do it.
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YSG Solar is the best company when it comes to price of the system, quality of materials, and workmanship. I checked about 7 different companies and YSG offered the best system with the most up to date, state of the art, solar equipment.
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Love being a Solar family now! My utility bill has dropped to next to nothing. YSG Solar was a fabulous company to deal with. Everything they said they would do, they did. The job was completed quickly and professionally with no hiccups.
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I had a 7kw solar system installed in July of 2012 by YSG and I'm thrilled with with the outcome, My first bill was under $20 and I have an inground pool and the pump that runs 12 hrs. a day, July and August were hot and the air conditioning ran just about every day all day.
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I was most satisfied with the professionalism of everyone from YSG. I would like to recognize Dave for his exceptional service on my project.
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Very knowledgeable courteous would highly recommend the crew was extremely professional.
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I was most satisfied with the way that it was installed. They cleaned up everything and we had no problems with the Installation
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We received rebates for making our home more energy efficient from both the utility company and the government.
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The quality of the work and professionalism of the staff was outstanding.
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