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Federal On-Site Renewable Power Purchase Agreements

Federal On-Site Renewable Power Purchase Agreements

On-site renewable power purchase agreements (PPAs) allow federal agencies to fund renewable energy projects with minimal up-front capital costs incurred.

With a PPA, a developer installs a renewable energy system on agency property under an agreement that the agency will purchase the power generated by the system. The agency pays for the system through these power payments over the life of the contract. After installation, the developer owns, operates, and maintains the system for the life of the contract.

The Federal Energy Management Program (FEMP) provides resources, training, and assistance to help agencies successfully use on-site renewable PPAs. To get started, see:

Power Purchase Agreements at a Glance
Benefits Considerations
  • Minimal up-front capital costs
  • Ability to monetize tax incentives
  • Typically a known, long-term energy price
  • No operations and maintenance responsibilities
  • Minimal risk to the agency
  • Federal sector PPA experience still growing
  • Contract term limitations
  • Inherent transaction costs
  • Challenges with contract terms and conditions



  • Federal On-Site Renewable Power Purchase Agreements: This FEMP eTraining core course provides federal energy and facility managers and contracting officers with knowledge to develop a PPA.

  • Introduction to Alternative Financing for Energy Efficiency and Renewable Technology: Webinar explains how to use alternative financing tools to plan and implement energy- and water-saving measures and renewable energy systems in federal facilities. Read the updated PPA portion of the webinar, which features typical PPA processes, benefits, challenges, and case studies.

  • Regulatory Considerations for Developing Distributed Generation Projects: Webinar explains regulatory implications for on-site renewable PPAs. View the webinar recording or presentation.

  • Regulatory Considerations for Developing Generation Projects on Federal Lands: Webinar explains the types of transactions that fall under the Federal Energy Regulatory Commission's jurisdiction, as well as pertinent federal laws and how they apply. View the webinar recording or presentation.

  • Introduction to Renewable Energy Project Finance Structures: Webinar explains the most common financing structures (sale leaseback, partnership flip, and inverted lease) used by project developers and their investors, and describes motivations underlying the choice of structures developers prefer to use. View the webinar recording or presentation.

Project Assistance

FEMP offers procurement and technical assistance to federal agencies interested in implementing PPAs through experts at the National Renewable Energy Laboratory (NREL) and Lawrence Berkeley National Laboratory (LBNL).

These laboratory experts often facilitate cooperation between the federal agency and DLA-Energy, General Services Administration, and the Western Area Power Administration. DLA-Energy has a renewable energy program, while the Western Area Power Administration has authority to sign longer-term contracts for federal agencies in its service territory. For more information, contact Chandra Shah at NREL or Gerald Robinson at LBNL.