Solar Power Purchase Agreement Procurement
Integral Group’s Advanced Energy Services team advised a leading US university during its effort to purchase electricity from 11 solar power plants. The project resulted in a solar Power Purchase Agreement (PPA), in which the university purchases solar power over a 15-year contract term, with no upfront costs.
The team commenced with a financial analysis of the prospective solar project’s impact. This detailed analysis examined historic and forecasted wholesale power prices, including hundreds of thousands of data points covering hourly locational marginal price (LMP) information. Integral’s project pro forma — featuring a discounted cash flow analysis and key financial metrics (e.g. Net Present Value) to assess potential impacts — became the key driver of contract negotiations.
As a result of Integral’s advice and support during negotiations with the lender, the university is expected to save $4M over the contract term. This project leveraged the Advanced Energy Service team’s unique expertise as an owner’s representative for clean energy procurements, which includes over 115 MW of transactional experience on solar-related purchasing.