PPA vs utility
PPA vs Utility Power Cost Calculator
Use this comparator to test whether a physical or virtual PPA beats utility power after escalation, basis risk, REC value, and contract term.
The output separates energy economics from risk items so buyers can see when a PPA is a hedge, a sustainability instrument, or a cost reducer.
How to use this calculator
Use when comparing renewable procurement, utility tariffs, and long-term power hedges for AI capacity.
- 01
Enter the buyer scenario
Start with the editable ppa vs utility inputs and replace defaults with current quotes, tariffs, engineering values, or buyer assumptions.
- 02
Review the modeled outcome
Use the modeled outcome, decision checks, and copied brief to compare the scenario against buyer constraints.
- 03
Verify the result before acting
Check the caveats, source table, and related guides before treating the output as a quote, bid, or final site decision.
Calculator inputs
Scenario defaults are editable. Replace them with current quotes, utility tariffs, tax counsel inputs, or engineering values before relying on the output.
PPA economic case
Modeled outcome
PPA is favored on present value before hourly shape, credit, accounting, and project delivery risk.
Utility PV
$238M
PPA PV
$170M
Present-value savings
$68.26M
Break-even PPA strike
$82.41/MWh
Decision checks
- Utility PV: $238.15M
- PPA PV: $169.89M
- Break-even strike price: $82.41/MWh
How does the ppa vs utility model work?
The comparator discounts annual utility cost and PPA cost across the selected term. Utility cost escalates from the all-in rate. PPA cost uses the strike price, PPA escalation, buyer-entered basis and congestion risk, and REC or carbon value. The model reports present-value savings and the break-even PPA price. It does not simulate hourly shape, settlement node exposure, credit support, curtailment, or accounting treatment.
What should buyers verify before using the result?
- Virtual PPA results can diverge from load-zone utility costs because settlement, basis, congestion, and shape risk are market-specific.
- REC ownership, additionality, carbon accounting, and contract-for-differences treatment should be reviewed with counsel and finance.
- Interconnection queues and project completion risk can change the effective value of a PPA.
Related guides and tools
Which sources support this ppa vs utility model?
| Source | Use in this tool | Link |
|---|---|---|
| Pillsbury power purchase and interconnection agreements | Data center PPA and interconnection agreement structures. | Open |
| Perkins Coie energy procurement strategies for data centers | PPA and virtual PPA structure considerations. | Open |
| Orrick powering data centers guide | Power procurement and interconnection considerations for data centers. | Open |
| Columbia Business School, The Race to Power Data Centers | Context for data center energy procurement and power constraints. | Open |
| ESG Dive coverage of data center PPAs | Recent example of data center renewable power procurement. | Open |
| 3Degrees data center PPA strategy example | Example of regional data center renewable procurement planning. | Open |
| U.S. EIA Electric Power Monthly | Electricity price and sales context for power cost assumptions. | Open |
| NREL Voices of Experience: Microgrids for Resiliency | Microgrid resiliency concepts and planning considerations. | Open |