You know you want to sell electricity to utility companies, but how do you do that? You can do that by utilizing one of several utility scale solar financial models. The first model is a power purchase agreement (PPA). In a PPA, the solar developer owns the solar installation, and they sell the generated electricity to the power purchaser, also called an offtaker. For example, we offer PPAs to some of our clients where we own the solar array and they pay us to use the electricity. In this case, you would be the solar developer and the utility scale solar company that purchases the electricity from you would be the offtaker. This financial model usually works well for commercial and industrial solar arrays.
If you have a smaller solar installation, you can take advantage of the Public Utility Regulatory Policies Act of 1978, or PURPA. PURPA encourages economic competition for solar power generation and power delivery. If your installation meets PURPA’s requirements for a Qualified Facility (QF), you have the right to interconnect your solar array to a utility-controlled grid to distribute your energy to utility companies. Additionally, if your installation is less than 20 MW, then utility companies must meet a mandatory purchase obligation where they pay for your renewable electricity at avoided cost. Avoided cost is what the utility company would have paid to purchase or generate that electricity if your QF did not exist. This model could be a good fit for your solar installation, especially if it’s on the smaller side.
If you are a commercial real estate owner, however, you can make money off of solar by leasing your land to utility companies for their solar installations. This is less direct than the other options listed here, but it’s another good way to turn a profit with renewable energy.