Long-term electricity supply contracts for producers and companies

Power purchase agreements (PPAs) are long-term electricity supply or purchase contracts and have become a key instrument in the renewable energy market. They connect electricity producers from solar and other renewable energy plants directly with electricity consumers—in particular with companies that want to make their energy procurement sustainable, predictable, and economical.

For companies, PPAs offer the opportunity to purchase green electricity directly from renewable energy plants and to hedge against volatile electricity prices in the long term. At the same time, they make a measurable contribution to decarbonization and the achievement of climate targets. For electricity producers, PPAs create stable revenues and a reliable basis for the operation of existing plants and the construction of new ones.

We basically distinguish between two types of PPAs: 
In a corporate PPA, a company—often from industry or commerce—purchases renewable electricity directly from a solar park. In a merchant PPA, an electricity trader purchases the energy generated and markets it further or trades it on the electricity exchanges.