April 18, 2008. Nexamp now offers businesses and governmental organizations the benefits of renewable energy without any front-end capital cost. We do this by building, owning and operating the generating facility (for instance, a solar photovoltaic array) and selling the electricity produced to the host customer. The terms and conditions of the arrangement are set forth in a Power Purchase Agreement (“PPA”). Nexamp’s standard PPA requires the customer to lease the roof or grounds for the generating facility to Nexamp at no cost and enter into a 10- to 25-year agreement to buy the electrical output from the facility for a monthly payment based on an agreed upon price per kWh. The customer also has the right to purchase the facility at a fraction of its original cost at various points throughout the term of the PPA.
The main advantage of PPA financing is that customers have no capital outlay while hedging their costs against future electric utility increases and benefiting from the goodwill associated with renewable power. Moreover, all maintenance costs and operating risks are shifted to Nexamp. To qualify for PPA financing, the customer must have an investment grade credit rating.