PPA (Power Purchase Agreement)

What is a Power Purchase Agreement (PPA) in the Solar Industry?

A Power Purchase Agreement (PPA) is a long-term contract under which a solar power system is installed at your site and you agree to buy the electricity it generates at an agreed price. In a SUNGROW ENERGY PPA, a third-party investor funds and owns the system during the contract term, and ownership transfers to you at the end of the term.

In simple terms, you get solar power without necessarily paying the full upfront cost of installing the system. Instead, you pay for the electricity the solar installation produces.

PPAs are commonly used for commercial buildings, factories, shopping centers, schools, hospitals, warehouses, and other facilities with high electricity consumption.

1. How a solar PPA works?

You pay only for the solar electricity delivered under the agreement. This can help reduce your electricity expenses, and you avoid a large upfront capital investment. When the contract term ends, the system becomes yours.

2. Example of a solar PPA for a factory in the Philippines

Suppose SUNGROW ENERGY develops a 500 kW grid-tied rooftop solar system for your factory.

Here is an illustrative example of how the arrangement could work:

These are sample assumptions, not a site-specific quotation or guaranteed generation figures.

Estimated annual financial results

Before applicable adjustments, residual utility charges, and other costs.

In this example, you buy solar electricity at ₱6/kWh instead of paying an assumed ₱10/kWh for the same electricity. You still pay your utility for electricity you draw from the grid when solar production is not enough, plus any remaining utility charges. Actual savings depend on your site, your consumption, and your contract.

At the end of the 20-year PPA term in this example, ownership of the solar power system transfers to you.