Power Purchase Agreement
Everything you need to know.
Adoption of Open Access Solar power in corporate sector is growing year on year to reduce carbon emissions and to save the cost of power. Every time the customer has to go through lot of thought of process before signing the PPA since they may have lot of questions to be answered before making the right decision. They will be evaluating multiple options like short term vs long term, part capacity vs maximum capacity, flat vs escalation tariff etc.,
In continuously evolving power sector someone’s decision may be a best decision in the short term but it might not have a great impact in the long runs. For example if we take the case of Karnataka Open Access market most of the PPAs were signed between Rs. 4.5 to 5.5/kWh for 10 years tenure. The customer who has signed for long term contract at Rs.5/kWh for their maximum capacity may think now the power is available at <Rs.4/kWh on the other side the customer who hasn’t signed any contract is buying third party power at >Rs.6.2/kWh.
Hence by analysing multiple options and opting for a portfolio approach might have better results in the long term. We have summarized the key PPA terms and the multiple options available here to take a informed decision