From 2012 to September 2015, the National Renewable Energy Laboratory (NREL) sponsored the Solar Access to Public Capital (SAPC) working group, which was intended to develop a standardized set of documents to facilitate securitization of solar assets, both residential and commercial.

One of the key documents developed by the SAPC was a form of commercial PPA. The PPA is structured so that the seller undertakes construction, operation and maintenance of the solar facility and the purchaser agrees to pay a monthly charge based on $/kWh of energy produced.

The SAPC commercial PPA is noteworthy for the protections afforded to lenders. As would be expected in a financable form, it is also pro-seller (i.e. favoring the solar company buying and operating the facility).

Key terms of the SAPC PPA include:

  1. Title: the seller retains ownership of the solar asset and all of the associated SRECs, greenhouse gas credits and other tax credits.
  2. Conditions precedent: A lender-approved EPC contract and an easement agreement (or lease) providing access to the property must be signed.
  3. Non-Standard Repairs: In the event of non-standard repairs, the parties agree to adjust pricing, schedule and other terms of the PPA.
  4. Outages: Purchaser is permitted to be offline no more than 48 hours per year – if the purchaser is offline more than 48 hours per year, then that is considered an unscheduled outage and the purchaser is liable for lost revenue.
  5. Change in law: Parties agree to a change in law provision for the benefit of the seller.
  6. Alternative location: If purchaser terminates operations at a particular location, the purchaser shall provide the seller with an alternative location and pay for relocation costs and an adjustment, if applicable, for inferior insolation (i.e. less sunlight).
  7. Removal: Seller shall be responsible for the price of removal of the facility upon expiration of the term.
  8. Restoration: Seller agrees to repair and restore the solar asset, unless more than 50% of the system is destroyed, in which event purchaser shall pay for the cost of restoration of the system and an amount equivalent to the termination payment.
  9. Purchase at fair market value: Any time after the sixth contract year, purchaser may purchase system at fair market value.
  10. Force Majeure: The force majeure provision requires payment if the force majeure event solely impacts purchaser’s ability to make payments and permits termination if the force majeure event lasts for more than an agreed number of days.
  11. Assignment: The assignment provision permits assignment by seller to lenders and operation of the solar asset by a third-party servicer

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