Clean Energy Toolkit Topic: Contract for Solar Energy Management Services

Municipalities interested in solar have multiple options for pursuing it, including direct ownership, community shared solar, or a power purchase agreement (PPA). Each approach to solar has different potential risks and benefits. A solar PPA may be a good option if access to up-front capital to purchase a solar photovoltaic (PV) system is an issue.

With a solar energy management services (EMS) contract, Massachusetts municipalities may lease public space, such as a school roof or capped landfill, for the installation of a third-party owned and operated solar PV system and enter into a long-term PPA for the electricity produced by the system through a single, streamlined solicitation process. Over the term of the contract, the municipality purchases 100% of the energy generated by the PV system. With net metering, credits for power generated are applied to the municipality’s account—either the building’s utility account or (with virtual net metering) the municipality’s other utility accounts. When the system produces more power than is needed at the project site, excess power is exported to the grid, the utility meter effectively spins backward, and the customer is credited at near-retail rate for the electricity sent on to the grid. This strategy describes how to obtain electricity from a renewable source through an EMS model.

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