Third Party Sale
In a third-party solar power sale, a solar power developer installs, owns, and operates a solar system and sells the generated electricity to a consumer, typically a business or corporation, through a Power Purchase Agreement (PPA).
How it works:
A third-party developer (like a solar company) builds and maintains a solar power plant. They then enter into a PPA with a consumer, agreeing to sell the
generated electricity for a set period (e.g., 10-25 years). The consumer purchases the electricity at a predetermined rate, often lower than the grid tariff. The consumer doesn't own the
solar system, but benefits from the lower electricity costs and reduced environmental impact.
Benefits for the consumer:
Lower electricity costs: Solar power generated through third-party PPAs is often cheaper than electricity from the grid. No upfront investment: Consumers don't need to invest in the solar system, reducing capital expenditure. Predictable energy costs: The PPA locks in a fixed tariff for the agreed-upon period, providing budget certainty. Reduced operational burden: The developer handles installation, maintenance, and operation of the solar plant. Access to renewable energy: Consumers can contribute to a cleaner energy future without owning the solar assets.
Benefits for the developer:
Long-term revenue stream: PPAs provide a predictable and consistent income stream from the sale of electricity. Ability to scale operations: Developers can build larger solar plants and sell power to multiple consumers. Access to financing: PPAs can be used to secure financing for solar projects.