You are here

On-Site Renewable Power Purchase Agreements

The Federal Energy Management Program (FEMP) provides information, training, and assistance to help agencies successfully use on-site renewable energy power purchase agreements (PPAs). PPAs allow federal agencies to fund on-site renewable energy projects with minimal up-front capital costs incurred. With a PPA, a developer installs a renewable energy system on agency property under an agreement that the agency will purchase the power generated by the system. The agency pays for the system through these power payments over the life of the contract. After installation, the developer owns, operates, and maintains the system for the life of the contract.

PPAs At a Glance

There are many benefits and considerations for PPAs.

Benefits
  • Minimal up-front capital costs
  • Ability to monetize tax incentives
  • Typically a known, long-term energy price
  • No operations and maintenance responsibilities
  • Minimal risk to the agency
Considerations
  • Federal sector PPA experience still growing
  • Contract term limitations
  • Inherent transaction costs
  • Challenges with contract terms and conditions

Training

FEMP offers training to help agenices understand PPAs and successfully implement PPAs in renewable energy projects.

  • Federal On-Site Renewable Power Purchase Agreements: This comprehensive eTraining core course provides federal energy and facility managers and contracting officers with knowledge and skills to develop an on-site renewable power purchase agreement.

  • Introduction to Alternative Financing for Energy Efficiency and Renewable Technology: Webinar tells how use alternative financing tools to plan and implement energy- and water-saving measures and renewable energy systems in federal facilities. Read the updated PPA portion of the webinar, which features typical PPA processes, benefits, challenges, and case studies.

  • Regulatory Considerations for Developing Distributed Generation Projects: Webinar teaches about regulatory implications for on-site renewable PPAs. View the webinar recording or presentation.

  • Regulatory Considerations for Developing Generation Projects on Federal Lands: Webinar teaches about the types of transactions that fall under the Federal Energy Regulatory Commission's jurisdiction, pertinent federal laws, and how they apply. View the webinar recording or presentation.

  • Introduction to Renewable Energy Project Finance Structures: Webinar teaches about the most common financing structures (sale leaseback, partnership flip, and inverted lease) used by project developers and their investors, as well as motivations underlying the choice of structures developers prefer to use. View the webinar recording or presentation.

Visit the FEMP Training Search for more training opportunities.

Project Assistance

FEMP offers procurement and technical assistance to federal agencies interested in implementing PPAs in renewable energy projects through experts at the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory. These laboratory contacts often facilitate cooperation between the federal agency and the DLA-Energy, DOA, General Services Administration, and the Western Area Power Administration. DLA-Energy features a Renewable Energy Initiatives team, while the Western Area Power Administration has authority to sign longer-term contracts for federal agencies in its service territory.

For more information about project assistance, contact:

David McAndrew
Federal Energy Management Program
202-586-7722

Chandra Shah
National Renewable Energy Laboratory
303-384-7557

Gerald Robinson
Lawrence Berkeley National Laboratory
510-486-5769

Request for Information

The U.S. Department of Energy issued a PPA request for information (RFI) on March 2, 2011. The RFI identified PPA project barriers and requested input from the private sector regarding how to best address these barriers. FEMP received responses on April 11, 2011, and compiled a summary of the responses.