Corporate PPA ROI & LCOE Modeler
Your deal
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What if market prices move?
Year by year (base case)
| Year | Hub price | Your price | MWh | Annual impact | Cumulative |
|---|
How the modeler works
- Virtual PPA: you keep buying power from your utility. Each MWh the project generates is settled financially: you receive (market price earned by the project − strike) when the market is above the strike, and pay the difference when it is below. Market price earned = hub price × capture factor.
- Physical PPA: the contracted power replaces part of your retail energy purchase. Saving per MWh = the energy supply price you would otherwise pay − (strike + sleeving and shaping fees). Supply prices move with the market trend.
- On-site solar: saving per MWh = your all-in retail rate (energy plus delivery) − the system’s levelised cost. Use Lazard’s 2026 range of about $88–197/MWh for commercial and industrial solar as a guide, or your installer’s quote.
- Scope 2: covered MWh × grid emission factor, claimable under the market-based method when you retain and retire the renewable energy certificates.
- Scenarios shift the market price trend down and up by the band you set, to show the hedge.
A screening model, not financial or accounting advice. It ignores basis risk between the project node and the hub, curtailment, negative prices, credit support and discounting. Virtual PPAs are often accounted for as derivatives; check with your auditor.
Related guides and tools
Frequently asked questions
What is a virtual PPA?
A virtual power purchase agreement (VPPA) is a financial contract for difference. The buyer agrees a fixed strike price with a renewable project. The project sells its power into the wholesale market; if the market price is above the strike, the developer pays the buyer the difference, and if it is below, the buyer pays the developer. The buyer keeps buying electricity from its utility as normal and usually receives the project’s renewable energy certificates.
What is the difference between a virtual and a physical PPA?
In a physical PPA the buyer actually takes the electricity, usually delivered or ‘sleeved’ through a utility or retailer, and pays the PPA price instead of its normal energy supply price. In a virtual PPA no power changes hands; the contract is settled in cash against a wholesale market price. Physical PPAs need the buyer and project to be in the same market and often involve sleeving fees; virtual PPAs can be signed with projects anywhere in a liquid market.
What are PPA prices in 2026?
LevelTen Energy’s Q3 2026 index put its core-markets P25 solar price at $64.23 per MWh and wind at $68.27 per MWh in North America. P25 means the 25th percentile of developer offers, so a quarter of offers were cheaper. Solar prices rose 4.9% in the quarter, driven largely by new Section 232 tariffs on solar components.
How do I use this PPA calculator?
Pick a buyer preset or choose a structure (virtual PPA, physical PPA or on-site solar), set your annual load and the share to cover, and enter a strike or system cost, today’s wholesale hub price, your energy supply or all-in retail rate and a price trend. The modeler shows year-one and lifetime cash impact, a falling and rising price scenario, the break-even price and the Scope 2 tonnes you can claim. Defaults are illustrative, so replace them with your own quotes and forward curves.
Does a PPA reduce Scope 2 emissions?
Under the GHG Protocol’s market-based method, a company can report lower Scope 2 emissions if it retains and retires the renewable energy certificates from its PPA. Location-based Scope 2, which uses average grid emission factors, does not change. The GHG Protocol is revising these rules and is considering a stricter method with hourly matching and deliverability requirements alongside the current approach.