Power Purchase Agreements (PPAs) are at the heart of many energy projects. These long-term contracts define how electricity will be bought, sold and delivered, usually between a developer and a utility or corporate buyer. They bring structure and predictability, especially in solar and wind energy deals. But when something unexpected happens, these agreements can quickly become a source of conflict.
Disputes often arise over delays, pricing changes or failures to meet delivery targets. Natural disasters, shifting regulations or supply chain issues may trigger disagreements over who is responsible and whether the contract allows for exceptions.
Clear skies do not always last
PPAs might seem straightforward, but once challenges hit, even small gaps in the agreement can lead to costly legal issues. To protect your interests, it helps to focus on key areas that become flashpoints. Some common trouble spots include:
- Force Majeure Clauses: Confirm that your contract clearly outlines what counts as an “uncontrollable event.” Ambiguity here can cause big delays in resolving disputes.
- Pricing terms: Disagreements often start with how pricing is structured, especially when market rates shift. Fixed-price vs. market-based models should be clearly defined to prevent confusion.
- Delivery timelines: Set realistic deadlines and outline what happens if either side falls behind. Late completion or delayed payments are common sources of conflict.
- Termination right: Know when and how the agreement can end. Without clear terms, one party may feel trapped while the other looks for a way out.
No one expects a contract to go off track, but it happens. And when it does, having the right guidance can make a difference.
If you are dealing with or hoping to prevent issues tied to a PPA, a legal professional familiar with the energy space can help you see the full picture and keep your project on steady ground.