Power Purchase Agreement Due Diligence Checklist

Dangerous substances. The AAE should award compensation for any liability of the project company for hazardous substances that are not transferred to the site by the project company or its contractors. If there is a separate land use agreement, environmental compensation is generally included in this document. term. To be considered the true owner of a project for tax purposes, the owner must have the opportunity to exploit the asset for its useful life. The average lifespan of a solar photovoltaic project is about 35 years, which will be confirmed during the project. That is why we always ensure that the term of the land lease can be extended to at least 35 years or that it is economically sound to remove and move the system to operate elsewhere. As a general rule, an evaluator may be consulted to support the idea that it is economically viable to transfer a project with a capacity of 2.5 MW and below, in which case a location agreement that cooperates with an AEA is acceptable, but it is always advisable to obtain evaluation support for this assumption. If you have a site lease with a term (including renewal conditions) of less than 35 years, it is always a good thing to consult a tax colleague and a marking for the client in the due diligence summary. If the project document is terminated in the event of bankruptcy, the consideration will enter into a new agreement with the financing party for the remaining term of the original Purchase Reasonably Expected document. The AAE should not contain provisions that could compel the host to exercise the purchase option. B, for example, the requirement that the host be responsible or the system at the end of the validity of AAEs. A C-I PPA should be a simple contract in which a host agrees to buy electricity from a system owned by a project company – this should include project company obligations that, of course, are related to the provision of such a service.

B such as installing the system and meter and maintaining insurance. A Net Metering Credit Purchase Agreement should look exactly like a PPP, except that the host buys net intermeter credits instead of purchasing power – and the system is not associated with the host (therefore, no rights of access, installation or other site provisions will be included). The assignment. The host should not be allowed to cede the AAEs without the prior written consent of the project company (or its agent). The project company should have the express option of awarding AAEs without the agreement of a portion of financing (including all vehicles or tax investment investors). (Note that any guarantee authorization from a financial party cannot be conditional on the funding party taking over AAEs – sometimes that language slips and it does not work – a party to the financing does not assume any obligations until an express approval of the agreement, which usually takes place only after the lockdown. Jocelyn E. Lavallo is a partner and economic lawyer for Foley and Lardner LLP. Ms. Lavallo`s practice focuses on financing, developing, buying and selling energy and infrastructure projects, with the main focus being solar and wind transactions in the United States.

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