NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Sarah Zimmerman

Power purchase agreements allow businesses to cut out the utility middleman and purchase energy directly from renewable providers, and they’ve become a popular way to meet sustainability goals while potentially keeping costs down.

In theory, the agreements give renewable providers a long-term funding source for new projects, while businesses get a sustainable source of clean energy at a more consistent price. But many smaller businesses have traditionally had less access to PPAs as they don’t need the large amount of electricity required to support renewable projects.

Photo courtesy of Mike Mozart.