SOLAR PROJECT FINANCING WITH A PRE-PAID POWER PURCHASE AGREEMENT
A Pre -Paid Power Purchase Agreement (PPPA) may be the ideal financing structure for companies that have extra cash on hand but don’t have an appetite for the Federal ITC or MACRS (tax credits or accelerated depreciation) or for Non-Profit organizations. Making a pre-payment on the PPA lowers the overall cost of the PPA and the saving are passed on to the electric offtaker. The tax benefits of the PPPA are utilized by the investor and that value is passed back to the electric off-taker in the form predictable electric prices over a long term. Unlike a Capital Lease with a fixed purchase price at the end of the lease term, a PPPA may offer multiple out options throughout the term of the agreement.
~ Company Credit: A+ to B- Credit types and Financially Strong Companies.