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How a PPA Works to Save Municipalities $$ on Electricity

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Who are the Parties in a PPA?

A Power Purchase Agreement (PPA or third-party ownership model) requires three parties to function: i) the consumer (or the municipality); ii) the system owner or solar developer (who installs, owns, and maintains the solar system, usually on municipal land) and iii) the utility. The municipality buys the electricity from the developer at a reduced rate. The developer raises the money to build the solar array and sells the renewable energy credits to the utility. This helps the utility meet its renewable energy targets.