U.S. Department of Energy - Energy Efficiency and Renewable Energy
Federal Energy Management Program
On-Site Renewable Power Purchase Agreements
At a Glance
Power purchase agreements feature a variety of benefits and considerations for Federal agencies, including:
- No up-front capital costs
- Ability to monetize tax incentives
- Typically a known, long-term energy price
- No operations and maintenance responsibilities
- Minimal risk to the agency
- Federal sector experience with PPAs is still growing
- Contract term limitations
- Inherent transaction costs
- Challenges with site access contracts and concerns
On-site renewable power purchase agreements (PPAs) allow Federal agencies to fund on-site renewable energy projects with no up-front capital costs incurred.
With a PPA, a developer installs a renewable energy system on agency property under an agreement that the agency will purchase the power generated by the system. The agency pays for the system through these power payments over the life of the contract. After installation, the developer owns, operates, and maintains the system for the life of the contract.
The Federal Energy Management Program (FEMP) developed an introductory guide to PPAs for Federal on-site renewable projects.
The U.S. Department of Energy (DOE) issued a PPA request for information (RFI) on March 2, 2011. The RFI identified PPA project barriers and requested input from the private sector regarding how to best address these barriers. FEMP received responses on April 11, 2011, and compiled a summary of the responses. A Federal Utility Partnership Working Group (FUPWG) presentation further outlines the RFI.
FEMP created the following webinars that offer a wealth of information to help you develop successful projects.
Federal On-Site Renewable Power Purchase Agreements: This comprehensive eTraining course provides Federal energy and facility managers and contracting officers with knowledge and skills to develop an on-site renewable power purchase agreement.
Introduction to Alternative Financing for Energy Efficiency and Renewable Technology: Learn how to use alternative financing tools (PPAs, ESPCs, UESCs) to plan and implement energy and water saving measures and renewable-energy systems in your Federal facility. View the webinar recording. Read the updated PPA portion of the webinar, which features typical PPA processes, benefits, challenges, and several case studies.
Regulatory Considerations for Developing Distributed Generation Projects: Learn about the regulatory implications involved in designing business models for on-site renewable PPAs. View the webinar recording or the presentation.
Regulatory Considerations for Developing Generation Projects on Federal Lands: Learn about the types of transactions that fall under the Federal Energy Regulatory Commission's jurisdiction, the pertinent Federal laws and how they apply, and what it means to be a "public utility" or "transmitting utility" under Federal law. View the webinar recording or the presentation.
Introduction to Renewable Energy Project Finance Structures: Learn about the most common financing structures used by project developers and their investors (sale leaseback, partnership flip, and inverted lease), as well as motivations underlying the choice of structures developers prefer to use. View the webinar recording or the presentation.
For additional training opportunities, visit the FEMP events calendar or Training page.
FEMP offers technical assistance to Federal agencies interested in implementing PPA projects through renewable energy experts at the National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory.
These laboratory contacts often facilitate cooperation between a Federal agency and the Western Area Power Administration or DLA-Energy. DLA-Energy features a Renewable Energy Initiatives team, while the Western Area Power Administration has authority to sign longer-term contracts for Federal agencies in its service territory.
For more information about project assistance, contact:
Federal Energy Management Program
National Renewable Energy Laboratory
Lawrence Berkeley National Laboratory