by Jessica Campbell & Pam Maines | September 5, 2025
As we trek quickly through the remainder of 2025, the deadline for achieving ambitious 2030 corporate sustainability goals is coming into sharp focus. Intentions are no longer enough – organizations must now show the measurable progress they’ve made.
One theme that continues to emerge is how powerful Power Purchase Agreements (PPAs) and Virtual Power Purchase Agreements (VPPAs) are in relation to corporate sustainability progress. Strategic use of these tools can provide long-term price stability, support low-carbon generation, and secure future access to clean power in the face of rising demand (especially from AI and data centers, which could account for 6.7–12% of U.S. electricity usage by 2028). Additionally, in many cases, they help create access to renewable energy in local communities that may not have otherwise had access. That’s a win-win-win. Note: While many PPAs/VPPAs are for renewables, they can technically be structured for any generation source, with low-carbon baseload power in particular being of rising importance among purchasers.
Here’s why PPAs and VPPAs continue to gain traction with companies, and how they can help your organization create that win-win-win scenario.
What are PPAs and VPPAs?
Let’s start with the basics: a Power Purchase Agreement (PPA) is a long-term contract between a corporation and an energy developer to buy electricity. When associated with a specific renewable project – like solar or wind, the PPA can also include rights to the associated environmental attributes such as renewable energy credits (RECs). With a physical PPA, the company takes delivery of the energy.
A Virtual PPA (VPPA) is similar, but instead of taking physical delivery of electricity, the company receives a financial contract for power and renewable attributes at a fixed price while continuing to receive electricity from their local utility or supplier. A VPPA with a renewable energy project enables the developer to finance the renewable project while the company claims the associated RECs.
The Business Case: Climate & Beyond
- When On-Site Is Not a Viable Option: VPPAs and PPAs are fantastic solutions, especially when on-site options (such as on-site solar or wind) are not available. Importantly, VPPAs and PPAs also derisk future access to clean energy.
- Scope 2 Impact: By securing RECs tied to real, grid-connected, impactful energy projects, companies could reduce their market-based Scope 2 emissions. Note: Under current guidance, RECs can be claimed against Scope 2 emissions without a PPA or VPPA, but this may change with forthcoming GHG Protocol updates.
- Brand Leadership and Business Value: Consumers, investors, and stakeholders are looking to businesses to lead on climate. Supporting clean energy via a PPA or VPPA demonstrates a tangible commitment to sustainability. It’s also an ESG win – enhancing reporting, increasing transparency, and helping companies stand out in a competitive landscape.
- Energy Price Stability: Energy markets can be volatile. With a PPA or VPPA, companies lock in electricity prices for 10–20 years, providing budget certainty and a hedge against rising costs. Even if the VPPA is purely financial, the price protection and potential upside can support long-term planning.
- Catalyzing New Renewable Projects: Your agreement helps make new wind, solar, or geothermal projects financially viable. This isn’t just about reducing emissions – it’s about accelerating the clean energy transition. That’s climate leadership in action. Emerging best practices also include pairing PPAs/VPPAs with energy storage and implementing time and location matching for more accurate reporting and claims.
- Traceability Across Reporting and Claims: PPAs and VPPAs provide companies with a direct, traceable link to clean energy by delivering the project’s renewable energy certificates (RECs), which serve as verifiable proof of clean energy use. Additionally, a PPA or VPPA is tied to a specific energy project, enabling companies to point to a named wind or solar farm and make substantiated claims.
Why Consider a PPA or VPPA?
They reduce emissions. They provide cost certainty. They show the world your company is serious about sustainability. And with the right guidance, they can be a cornerstone of your corporate climate strategy.
ClimeCo can help you unlock the power of impactful energy solutions wherever you are in your journey. From PPAs and VPPAs to the acquisition of international Energy Attribute Certificates (“RECs” in North America), we can help your company strategically, responsibly, and with measurable impact.
Contact us to learn more, or listen to our ESG Decoded Podcast episode, “Equity in Action: Rethinking Corporate Climate Strategy”.
About the Authors
Jessica Campbell has over 12 years of experience in carbon markets and environmental project development. She drives strategic initiatives across ClimeCo’s program development portfolio, focusing on advancing cutting-edge climate solutions and emerging market mechanisms.
Pam Maines supports the work of sourcing and executing physical and virtual power purchase agreement (PPA) Transactions at ClimeCo. Her subject matter expertise evolved from 30 years of experience in various roles, from energy trading risk management to energy efficiency contracting to renewable energy transaction structuring.
