Power Purchase Agreements (or PPAs) have soared in popularity over recent years.
With the pressure on businesses to reach their Net Zero targets increasing and the popularity of PPAs soaring once again in 2024, more and more offerings are becoming available from the market.
As an energy buyer for your business, it’s important that you’re able to effectively weigh up the options available and make sure you make the best possible decision.
Below, we’ve shared some of the considerations you should make before choosing the right renewable generation partner for you.
Before choosing a renewable generation partner, be sure to find out:
1) If they have worked on similar deals before
If a prospective renewable generation partner has worked on similar PPA deals to yours previously, they will likely have a strong understanding of the electricity supply industry, as well as the different structures and mechanisms involved, and therefore be able to meet your needs as an energy buyer effectively.
2) How much the PPA will cost
One of the things that makes PPAs so attractive is price hedging. For the 10-15 years of your contract, you’ll pay a fixed price for the energy you buy, thus avoiding the volatile costs of other energy sources.
However, it’s also important to consider how much this fixed price will be from the individual renewable generation partners you speak to, and whether the power you purchase will be good value for money.
3) About their financial stability
As a long-term contractual agreement, PPAs do come with a level of financial risk. It’s therefore a good idea to ask your prospective provider questions, such as whether they have investors and who those investors are, to gauge their financial stability before you decide to sign a PPA with them.
Following the above guidance is a great starting point for choosing a renewable generation partner for your business.
If you’re currently looking for a PPA, our team at Innova would be delighted to speak with you to explore the different options available. Get in touch via the link below to find out more about how we can work together!
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Author: Andy Peyman, Head of Energy Sales