PPAs gaining significance for PV power plants

Solar power is becoming more competitive throughout Europe. With the help of long-term power purchase agreements (PPAs), subsidy-free PV power plants are increasingly being constructed and employed at firmly determined prices.

The 175-MW solar park Don Rodrigo recently completed south of Seville is the largest subsidy-free solar park in Spain to date. It is being financed by a 15-year power purchase agreement concluded with an international Norwegian energy company. According to insider estimates, Spain alone is currently in the process of planning solar PPA projects which will produce over two gigawatts of energy.

Subsidy-free solar projects are also up and coming in other countries, including Portugal, Italy and France. The consulting firm Enervis estimates that the market share of subsidy-free, PPA-financed PV and wind projects in Europe will increase to more than 25 percent by 2030, and to over 50 percent by 2040.

Located at the headquarters of a reputable heating and ventilation engineering company in Hessen, a 2-MW solar park built without the support of EEG subsidies poses another intriguing financing opportunity. The majority of the 1.8 gigawatt hours of solar power produced annually is consumed on-site, while the remaining amount is marketed on the stock exchange or transferred to other companies in accordance with energy laws.

A Hamburg-based startup is also exploring new avenues for subsidy-free solar park financing – For a monthly fixed amount starting at 39 euros, anyone can lease a part of the new solar park in Saxony-Anhalt, ‘harvest’ the power produced there and buy the rest in addition at cost price.

PPAs gaining significance for PV power plants