A sleeved PPA, or power purchase agreement, is a type of contract used in the renewable energy industry to finance the development and construction of new projects. Sleeved PPAs are a private agreement between an energy developer and an off-taker, typically a utility company or large industrial consumer, for the purchase of electricity generated by the energy project.
The “sleeved” aspect of the PPA refers to the fact that the agreement is structured as a “sleeve” or a special purpose vehicle (SPV) that is separate from the developer and off-taker. This allows for the transfer of ownership, liability and project risks to the SPV and protects both parties from any negative impacts.
Benefits of sleeved PPAs
One of the main benefits of a sleeved PPA is that it allows companies and organizations to reduce their energy costs by purchasing electricity generated by the solar power system at a fixed price, which is often lower than the price they would pay for electricity from the grid. This can help companies and organizations to save money on their energy bills and also reduce their carbon footprint.
Another advantage of a sleeved PPA is that it allows companies and organizations to reduce the risk associated with building and maintaining a solar power system. Since the solar developer is responsible for building, owning, and maintaining the solar power system, the company or organization is not responsible for any of the costs associated with the solar power system, such as maintenance and repairs. This can help companies and organizations to avoid the high costs and risks associated with building and maintaining a solar power system themselves.
Read: Which States Allow Power Purchase Agreements (PPAs)?
Opportunities for sleeved PPAs
A sleeved PPA can also be a good option for companies and organizations that have limited space or resources for building a solar power system. Since the solar developer is responsible for building, owning, and maintaining the solar power system, the company or organization does not have to invest in the solar power system themselves, which can be beneficial for companies and organizations that have limited space or resources.
Further, this approach offers the solar developer reduced costs associated with building and maintaining the solar power system, while also allowing the company or organization to benefit from the clean energy generated by the solar power system without having to invest in the solar power system themselves. A sleeved PPA can be a cost-effective and low-risk option for companies and organizations looking to reduce their energy costs and carbon footprint.
Read: 3 Benefits of Corporate Solar PPAs
Interested in PPAs for your organization?
EnergyLink team members are experts in energy project financing, and we know how to get the best financial setup for your organization and handle the tedious parts that come with bringing energy projects to life. If you are interested in solar technology, EnergyLink has the capability to handle not only the funding phase but also designing and building. Click the link below to learn more or speak to a team member at (866) 218-0830. Want to stay up to date on the latest energy news? Click the link below to sign up for our newsletter.
