Energy project finance reference. This educational resource covers project investment and financing concepts. It is separate from Jaken Energy’s commercial electricity and natural gas procurement service; it is not a financing offer or a promise of funding.
Virtual PPAs and corporate financial settlement
A virtual or financial PPA settles financially against specified market prices. It does not by itself replace the buyer’s physical utility supply. The project and the buyer’s facilities can therefore have different price exposures.
What to evaluate
Review strike price, settlement index, generation profile, basis risk, term, collateral and termination. Electricity bills at the property can rise while the financial agreement produces a loss. Model the combined position rather than treating the contract as a universal electricity-price hedge.
Build a defensible comparison
Specify REC delivery and environmental-claim rights. Corporate accounting, derivative and procurement policies may affect approval. Compare alternatives that meet the same business goal, including retail renewable supply or REC procurement where appropriate.
Documents and questions to prepare
- Settlement and retail-bill exposure
- Generation, basis and volume risk
- REC ownership and delivery
- Collateral, accounting and termination
For commercial property owners
Start with the property’s actual accounts, lease responsibilities and plans for ownership or sale. Keep commodity procurement, building improvements and project investment as separate decisions. Include the costs you retain and the savings you retain after tenant reimbursement. An improvement that lowers a tenant-paid expense may benefit tenants without producing the same increase in owner income.
Prepare a base case and a downside case using dated evidence for costs, revenue and funding. Any financing rate, tax benefit or return is a project assumption until supported by current documents. Legal, tax, engineering and lender review should follow the actual transaction.
For the existing property’s supply-cost decision, use the contract-cost calculator or request a property energy review.
Primary sources
Reviewed October 12, 2026. Program rules, tariffs and financing terms should be checked again before a transaction.