On 3 August 2009, two companies announced funding for solar power purchase agreement (PPA) funds:

• Renewable Ventures announced the completion of the Solar Fund V to finance more than $200 million in U.S.-based solar PPA projects.
• Design and integration firm Borrego Solar introduced a solar PPA, with $30 million backing from a PPA fund launched by Walsin Lihwa. Borrego is positioned to develop and finance solar projects worth a total of more than $100 million.

Gartner has observed energy prices, environmental concerns and national energy policies driving many enterprises toward becoming more active in managing their energy consumption. This includes implementing their own renewable-generation resources. After an enterprise has a developed an energy plan, audited its energy consumption and implemented money-saving energy conservation programs, it may also wish to consider solar-generated electricity. However, most enterprises are constrained by limited capital budgets that may preclude buying a photovoltaic (PV) system.

Over the past decade, firms such as Renewable Ventures, BP Solar and Solar Power Partners have developed solar PPAs that, when properly negotiated, may help firms save money and gain benefits such as:

• Lower (or equivalent) electricity rates than offered by their local utility
• Avoidance of the large capital outlay needed for a PV solar system
• Hedged electricity costs, since solar PPA contracts include annual price percentage increases that are generally lower than the approximately 6% annual rate increase from most utilities
• The choice of renewable-generation resources, which enables companies to position themselves as active in reducing greenhouse gas emissions

Despite these benefits, in 2009 the solar PPA model has suffered from the credit crisis, which has challenged solar PPA vendors' ability to fund new projects. Several recent key funding announcements by SunEdison, SolarCity, SunPower and SunRun may indicate that the credit market is thawing, which would allow more enterprises to capitalize on solar-generated electricity via solar PPAs.

Enterprises:

• Incorporate electricity from a solar PPA as part of your energy cost optimization strategy. Negotiate your contract to lower your electricity costs and hedge your future electricity costs compared with your utility's rates.
• Determine how important greenhouse gas emissions reporting and renewable energy credits are to your enterprise, and quantify how much you will be willing to pay for them. They will be add-ons to your solar PPA contract and negotiated into your electricity rate.

• "Case Study: How a U.S. School Saved by Going 'Green' With a Solar Power Purchase Agreement” — A school near San Francisco is reducing its power bills and affirming its environmentally friendly ideals by installing a PV electricity generation system allied to a solar PPA. By Alfonso Velosa, James Hines and Jack Heine
• "Dataquest Insight: Solar Module Manufacturers Will Turn to Solar Energy as a Service to Grow the U.S. Market” — In the midst of the credit crunch, PV vendors will begin to offer solar energy as a service to enable continued growth in the U.S. market. By James Hines and Alfonso Velosa

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