General Knowledge
General Science
Subjective
Mar 21, 2013
Why does the price of electricity rise over time under the terms of the PPA when the cost of sunshine does not change?
Detailed Explanation
It’s really a question of making the economics work. We could have rates remain flat or even possibly decrease over time; however, we would need a financial model that would make it economically viable for Horizon Solar Energy and our investor groups. We completely expect that utility electricity rates will continue to rise, perhaps aggressively, and therefore a fixed rate escalator that is likely to be lower than the utility rates is a sound and common way to structure the agreement.
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