Power Purchase Agreements (PPAs) are transforming the way organizations adopt solar energy, offering a no-cost path to renewable energy savings and environmental leadership. For businesses, municipalities, and other large energy users, PPAs deliver stable energy rates, reduced operational costs, and a meaningful contribution toward sustainability goals—all without the burden of upfront investment. But is a PPA right for you? Let’s explore who benefits most from this innovative financing model and why it’s gaining traction among forward-thinking organizations.
What Is a Power Purchase Agreement?
A PPA is a long-term contract that allows you to purchase the electricity generated by a solar system installed on your property. Here’s the catch: you don’t own the solar array. Instead, the developer (like Cedar Creek Energy) finances, installs, and maintains the system, and you agree to buy the energy it produces at a predictable rate—often much lower than current utility prices.
PPAs typically span 20–25 years, offering long-term cost savings and energy price stability. At the end of the term, you may have options to extend the agreement, purchase the system, or have it removed.
This financing model is particularly appealing for organizations with high energy demands but limited capital for upfront investment.
Who is a Good Candidate for a Power Purchase Agreement?
PPAs aren’t a one-size-fits-all solution—they’re most beneficial for specific types of organizations.
Large Energy Users
Organizations with high energy needs, such as manufacturing facilities, large commercial buildings, and schools, are excellent candidates for PPAs. Systems over 250 kW AC tend to deliver the most value, as the larger scale makes the financial benefits more pronounced.
Corporations with ESG Goals
Environmental, Social, and Governance (ESG) goals are no longer just aspirations for many companies—they’re requirements. Retail giants like Walmart, for instance, are under increasing pressure to meet specific environmental benchmarks, with measurable targets for renewable energy use.
A PPA helps corporations achieve these goals without tying up their capital in infrastructure. Every 1,000 kWh of solar energy produced earns one Renewable Energy Credit (REC), which counts toward ESG reporting. By locking in these credits through a PPA, companies can demonstrate leadership in sustainability while reducing operational costs.
Municipalities, Cities, and School Districts
Public entities often face tight budgets and rising energy costs. A PPA provides a practical solution, offering a way to go solar with zero upfront costs. By securing stable energy rates, these organizations can allocate funds to other priorities while demonstrating environmental responsibility.
Creditworthy Organizations
Because the solar provider finances the system, creditworthiness is a key factor in PPA eligibility. Companies with strong credit ratings are excellent candidates, while organizations with inconsistent revenue or limited credit history—such as churches or smaller nonprofits—may struggle to qualify.
The Benefits of a Power Purchase Agreement
The advantages of a PPA go beyond cost savings. Here’s why they’re an increasingly popular choice:
Zero Upfront Costs
One of the most significant barriers to solar adoption is the initial investment. With a PPA, you can harness the power of solar energy without any upfront financial commitment. The developer takes on all costs, including design, installation, and maintenance.
Stable, Predictable Energy Rates
PPAs allow you to lock in one of your largest operating expenses—energy costs—for the next 20–25 years. This is particularly valuable in today’s market, where utility rates often fluctuate unpredictably.
No Maintenance Hassles
Because the developer owns the system, they handle all maintenance, repairs, and performance monitoring. If an issue arises, it’s their responsibility to fix it, ensuring your energy supply remains uninterrupted.
Renewable Energy Credits (RECs)
A major perk of PPAs is the generation of Renewable Energy Credits. For every 1,000 kWh your system produces, you earn one REC. These credits can be used to meet sustainability goals or sold to other entities looking to offset their carbon emissions, adding even more value to your solar energy investment.
Environmental Impact
PPAs allow organizations to significantly reduce their carbon footprint, supporting the transition to clean energy without financial risk. This not only benefits the environment but also strengthens your brand as a sustainability leader.
Why Choose Cedar Creek Energy for Your PPA?
At Cedar Creek Energy, we specialize in helping organizations navigate the complexities of solar financing and energy savings. We understand that a PPA is more than a contract—it’s a partnership. Here’s what sets us apart:
- Custom Solutions: Every organization is different, and we tailor each solar project to meet your energy needs and financial goals.
- Expert Guidance: From securing approvals to ensuring your system performs optimally, our team handles every detail.
- Local Expertise: While PPAs are available in Minnesota, they’re not currently offered in Wisconsin due to state restrictions. Our team ensures you’re aware of all the available options in your area.
Is a PPA Right for You?
If your organization has high energy needs, a strong credit rating, and a commitment to sustainability, a PPA might be the perfect solution. Whether you’re a municipality looking to stabilize costs or a corporation striving to meet ESG goals, PPAs offer a path to clean energy with no upfront investment and maximum long-term benefits.
Take one of your biggest expenses—energy—and lock it in at a predictable rate for the next 25 years. That’s the power of a PPA.
Let’s Get Started
Ready to explore your solar options? Cedar Creek Energy is here to help you evaluate your eligibility for a PPA and guide you through every step of the process. Contact us today to learn how a Power Purchase Agreement can transform your energy strategy and help you achieve your sustainability goals.