Power Purchasing Agreement
A Power Purchasing Agreement (PPA) is a legal contract between a electricity provider and a land owner. The contract allows the electricity provider to produce power on the land owner's land or roof and the land owner buys the electricity primarily from the electricity provider. This deal is often done using solar technology, where the electricity provider will install, operate, and maintain solar panels on the land owner's roof. Then the land owner will buy the electricity from the solar panels on the roof. Part of the PPA is to set a price for the electrcity (often lower than the previous price the land owner was paying for power line electrcity). If the solar panels do not provide enough electricity for the land owner, then he will buy the rest of his electrcity from the power lines. If the electricity provider creates more electricity than the land owner needs, then he will sell the excess to the power lines.