pv magazine: An innovative offtake contract makes its solar sector debut

First used with wind projects, a proxy generation Power Purchase Agreement manages weather-related risk by settling a facility’s energy transfer based on a proxy generation index, rather than on actual metered generation. Operational risk shifts from buyer to seller.

The arrangement hinges on both the owner and the offtaker agreeing on a set of weather metrics. In the case of Lightsource bp’s Briar Creek facility, REsurety Inc. will serve as the calculation agent over the life of the contract.

The pgPPA reflects the fact that solar “can stand on its own two feet” and not be so tied either to a purchase power agreement or public policy directive, said Lee Taylor, REsurety’s founder and CEO in an interview.

Taylor said the structure emerged a few years ago in the wind energy sector, and variations are common in agribusiness, as well as ski resorts, among other weather risk-related markets.