If you’re a business engaging in the sale and supply of energy, you need a Power Purchase Agreement in place.
Power Purchase Agreements are complicated contracts, but they’re essential to protect your business revenue if you’re a power generator company.
What Is A Power Purchase Agreement?
A Power Purchase Agreement is a contract between an independent power generator and a purchaser for the sale and supply of energy.
The agreement can be used for a range of different types of energies, but it’s most commonly used in the sale and purchase of renewable energy, especially that generated from solar panels.
Entering into a Power Purchase Agreement for solar energy can be beneficial for businesses who wish to reduce their carbon emissions.
What’s Included In A Power Purchase Agreement?
A Power Purchase Agreement includes a range of provisions to help protect your commercial relationship.
Common clauses included in a Power Purchase Agreement are:
- Payment: If you accept payment, how will your business receive payment from the company purchasing your energy? What happens if a customer doesn’t pay?
- Time: For how long will this commercial relationship run?
- Renewal: Will there be an opportunity to renew the terms of the agreement? If the agreement is extended, will there be associated costs?
- Limitation of liability: Who is responsible if things go wrong?
- Termination: If the business relationship were to turn sour, how can the agreement be terminated?
Need Help With A Power Purchase Agreement?
A well-drafted Power Purchase Agreement will ensure your business is protected legally, and will cover all the relevant provisions between your business and companies who wish to purchase your energy generation services and goods.
Having a lawyer draft your Power Purchase Agreement will give you clarity around the terms on which you’re engaging with power purchasing companies.
At Sprintlaw, we focus on drafting easy to understand and comprehensive contracts for many online businesses.
Feel free to get in touch with us to have a chat about your business and your questions about Power Purchase Agreements. You can reach us email at [email protected].
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