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SOLAR POWERPurchase Agreement Contracts
presented by Chris AllweinApril 7, 2016
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What is a contract?
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Written or spoken agreement, especially one concerning employment, sales or tenancy, that is intended to be enforceable by law
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Basic Elements of Contract Law
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Basic Elements of Contract Law
OFFER
ACCEPTANCE
CONSIDERATION
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Power Purchase Agreements
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Contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer)
PPA
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Financial agreement where a developer arranges for the design, permitting, financing and installation of a solar energy system on a customer’s property at little to no cost
Solar PPA
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Why the interest in
SOLAR?
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1 Hedge Against Price Volatility
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2 Reduction in Capacity +Transmission Charges
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3Use it to Demonstrate Commitment to Green Energy
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4 Early Adopter
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SOLAR PPAs
Construction Contract
Property Lease orLicense
FinancingMechanism
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Covers payment, specific documents, authority, change orders, work schedule, etc.
Construction Contract
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Provides developer with legal permission to construct array on the property
Property Lease or License
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Financing MechanismParts + Purposes
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Financing MechanismCustomer purchases power at fixed or escalating rate
Developer receives income from power sale, tax credits and RECs, and maintains system for duration of PPA
Duration of Agreement is anywhere from10-25 years
Host Customer may have option to purchase system at some interval in the contract period or at conclusion of PPA Contract period
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1 Power Purchase: Fixed or Escalating?
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2 Tax Credits + RECs
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3 Duration of Contract
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4 Option to Purchase
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Summary: PPA is a Contract between
Customer Host and Developer Owner to purchase electricity
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PPA-Specific Contract Parts:Fixed or Escalating Price;
Addresses Tax Credits and RECS;Duration of Contract and Options
to Purchase System
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Thank You!Christopher J. AllweinKegler Brown Hill + Rittercallwein@keglerbrown.comkeglerbrown.com/allwein614.462.5496
Todd M. WilliamsShindler, Neff, Holmes, Worline & Mohlertwilliams@snhslaw.com419.725.2273snhslaw.com
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