Rooftop PPA defaults and its remadies

PPA default occurs when there is a breach of contract between developer and off-taker. The off-taker may default due to a failure to make agreed payments, failure to perform the
contracted obligations, provision of incorrect information in the initial PPA agreement, and shutdown of the off-taker’s business. The developer will be in default if the system does not
generate the amount of electricity agreed in the contract or technical default of the system.
Remedies of default: In the case of off-taker default, the developer can terminate the PPA, remove the system, and take appropriate legal measures to enforce the PPA. In case of
developer default, the off-taker will not be liable to provide any compensation and the developer will need to remove the system at its own cost. However, the developer can enter into a new PPA agreement.
Termination compensation: The termination of compensation PPA includes a pre-determined exit fee for the cost of removing and installing the system in another location. The exit fee can
be calculated on the basis of net present value of net (after O&M expenses) PPA payments over the term of the contract or book value of the system. The discount rate must be agreed
upon between the developer and off-taker.

Transfer of rights and responsibilities: There must be provisions in the agreement which allow the original developer to transfer its rights to another developer if it ceases to be the main
developer. The off-taker must allow the new developer to take on all the original developer’s roles and responsibilities, thereby maintaining the supply of electricity and providing other
necessary operating services.