Path-Q Solar

What financial risk arises if a PPA payment continues while the system is offline?

Answer

If payments continue during downtime, the customer bears the risk of paying for unavailable electricity while still paying the utility for replacement power. The contract should be evaluated for outage exclusions, payment suspension, production guarantees, credits, and repair deadlines.

Key points

  • Separate fixed or minimum PPA payments from charges based on delivered energy.
  • Check whether scheduled maintenance, grid outages, equipment failure, or force majeure are treated differently.
  • Model the combined PPA and replacement-electricity cost during downtime.
  • Review remedies, service-level commitments, and termination rights.

What it depends on

  • PPA payment formula
  • Downtime and force-majeure clauses
  • Production guarantees and credit mechanism
  • Expected outage duration and utility replacement cost

Risks and trade-offs

  • Long outages can create double payment exposure.
  • A production guarantee may provide only limited credits or may exclude important causes.
  • Payment suspension rights may be narrower than the customer expects.

Information you may need

  • Downtime, outage, and payment clauses
  • Production guarantee and credit schedule
  • System monitoring and repair obligations
  • Expected utility cost during outages

Your next step

What to do next

Review the contract's downtime provisions and model a short, moderate, and extended outage before signing.

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SQ01915