Home | Onsite-Offsite PPA
Onsite-Offsite PPA
Power Purchase Agreement (PPA) can be entered into on Onsite or Off-site basis. This is the contract between the Electricity generator Company/Agency and the consumer of purchaser of the power. The term ‘onsite’ and ‘off-site PPA stands for Power Purchase Agreement, a contract between an electricity generator and a power purchaser. “Onsite” and “off-site” refer to where the electricity generation takes place in relation to the purchaser’s location.
Onsite PPA:
Under this agreement, the power generation infrastructure is installed by the Electricity Generation Company/Agency. This agreement is all about the tenure, pricing pattern, terms of payment and responsibilities of both the parties.
This however needs suitable space and resources at Purchaser’s site. In an onsite PPA, the solar agency/ company installs the power generation infrastructure at the site or premises of the purchaser. The ownership however, remains with the Solar agency/ company who owns and maintains the infrastructure (e.g. solar panels, inverters etc.). Electricity generated onsite is directly consumed by the purchaser.
Off-site PPA :
Under this agreement the power generation infrastructure is installed away from the purchaser’s site; most often in a separate geographic region. The ownership of the plant infrastructure remains with the Solar EPC company who operates the infrastructure at the remote location. Electricity generated is delivered to the purchaser through the grid or dedicated transmission line. Other terms such as tenure of the agreement, pricing pattern, terms of payment, responsibilities of both the parties etc. are worked our suitably.
Benefits :
You get easy access to renewable energy projects that are installed on the larger scale.
Great potential for cost savings
The purchaser gets flexibility in choosing renewable energy source and locations.
