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Third-Party Finance for Commercial Photovoltaic Systems: The Rise of the PPA
Volume 1, Issue 1
Authors:
Mark Bolinger, Lawrence Berkeley National Laboratory
Abstract:
LLike other sources of renewable energy, solar energy has historically depended on favorable government policies to compete with fossil fuels. While the relentless rise of solar-cell efficiencies over the past 20 years has brought the cost of generating electricity from solar energy closer than ever to parity with fossil fuels, solar-energy projects are still far more capital intensive than coal and natural gas plants. High capital investment requirements have hobbled scores of otherwise compelling technologies from establishing a foothold in mainstream commercial markets. Project developers in the solar-energy industry will need to capture the full panoply of policy benefits available at the federal, state and local levels of government, including tax credits, renewable energy credits, tax-depreciation benefits among many others. This article surveys the principal elements of U.S. solar-energy finance and several strategies in packaging those elements in “non-residential” grid-connected PV systems, including financing through a “power purchase agreement” (PPA).
Full Text (PDF)
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