Power Purchase Agreement (PPA)
Gridlync land and infrastructure glossary.
A power purchase agreement is a long-term contract in which a buyer agrees to purchase electricity from a generation project at agreed prices and terms. PPAs underpin the financing of most renewable energy projects. They lock in a price per megawatt-hour over 10 to 25 years, giving lenders the predictable revenue they need to finance construction. The contracted offtake only has value if the land rights beneath the project remain secure for the full term.
A PPA depends on the land rights beneath the project. Gridlync keeps the leases, easements, and obligations supporting a project organized alongside its commercial milestones.
Example
Crescent Solar signs a 20-year PPA to sell power to MetroGrid Utility at $38 per megawatt-hour. That contract anchors the project’s financing, but it depends on Crescent’s ground leases with the Holloway family staying in force for the full 20 years.