What is a Solar Power Purchase Agreement, and How Does It Help Ontario Businesses Innovate?

Ontario businesses today face rising energy costs, increasing pressure to reduce emissions, and a need to stay competitive in a fast-changing marketplace. Traditional approaches to electricity purchasing leave companies exposed to rate increases and market volatility. 

A Solar Power Purchase Agreement (PPA) changes that equation by giving businesses long-term cost certainty, sustainability benefits, and access to clean solar power without heavy upfront investment. With Ontario’s new Corporate PPA (C-PPA) framework, companies now have more tools than ever to align financial performance with environmental responsibility.

What is a Solar Power Purchasing Agreement (PPA)? 

A Solar Power Purchase Agreement is a long-term contract (generally 10–25 years) where a business agrees to buy electricity directly from a solar energy provider at an agreed-upon rate. 

Instead of building and maintaining solar projects themselves, businesses can secure stable, predictable electricity pricing while the solar developer – such as VCT Group – owns, installs, maintains, and operates the system. 

There are two main types of PPAs: 

• Physical PPA: Solar is installed on site and electricity is physically delivered to the business operations on the property. 

• Virtual PPA (V-PPA): A financial agreement where electricity is sent to the grid, and a business purchases that energy at that fixed rate. Unlike a physical PPA, a V-PPA does not involve the transfer of physical energy but is instead a financial settlement. 

For Ontario businesses, the Independent Electricity System Operator (IESO) has created a Corporate Power Purchase Agreement (C-PPA) framework, giving companies a clear and regulated pathway to participate in this model.

C-PPAs vs. VPPAs in Ontario – What’s the Difference? 

In Ontario, Corporate Power Purchase Agreements (C-PPAs) are functionally the same as Virtual Power Purchasing Agreements (V-PPAs) used in other jurisdictions. C-PPAs are a financial settlement that is separate from the physical delivery of electricity. In a C-PPA, the power generator’s output can be used to offset the power user’s demand during peak periods, which can help reduce Global Adjustment charges under the ICI program. The key difference between C-PPAs and V-PPAs is who can access them. 

In Ontario, only Class A power users – large electricity consumers who qualify, and have met regulatory standards based on the Industrial Conservation Initiative (ICI) framework – are eligible to enter into these financial agreements. In Ontario, the Independent Electricity System Operator (IESO) is responsible for administering both the ICI program and the C-PPA framework.  

By contrast, in Alberta’s deregulated market, V-PPAs are available to a much wider range of organizations. Companies of all sizes, including those with multiple sites, can enter into these contracts. There is no Class A restriction, and the agreements function as a straightforward financial hedge with renewable credits. 

The Bottom Line: For Class A power users in Ontario, C-PPAs are a powerful tool that provides large energy purchasers with the advantage of Global Adjustment reductions. 

Key Benefits of Solar Power Purchase Agreements 

For Ontario businesses, the benefits of solar power purchase agreements extend well beyond sustainability: 

1. Cost Certainty: C-PPAs lock in predictable electricity pricing for 10-25 years, protecting against energy price volatility and insulating your company from future rate increases. 

1. No Capital Spend: The solar developer owns, installs, and maintains solar systems, removing the upfront costs to your business.  

1. Operational Savings: Reduce Global Adjustment charges by better managing peak demand under Ontario’s ICI program. 

1. Low Cost Carbon Reduction Strategy: Solar PPAs provide a transparent, credible way to meet sustainability commitments. They support measurable progress toward emissions reduction goals, enhance ESG reporting, and demonstrate leadership in an increasingly environmentally conscious marketplace. 

1. Scalability & Flexibility: PPAs can be structured for both onsite solar installations, like carports and rooftops, as well as offsite projects, giving businesses the flexibility to adapt to their property and energy needs. 

Why C-PPAs Matter for Ontario Businesses 

Ontario’s new C-PPA framework offers companies measurable financial advantages. For Class A ICI participants, Global Adjustment charges can represent a significant portion of annual electricity costs. By contracting directly with a solar generator, businesses can strategically lower those costs while securing renewable energy credits. 

This approach not only improves financial performance but also positions Ontario companies as leaders in sustainability and innovation – a reputation that carries weight with investors, regulators, and consumers alike. 

IESO’s New C-PPA Framework: What’s Changing? 

In June 2025, Ontario amended its electricity regulations to formally enable Corporate Power Purchase Agreements (C-PPAs). Under this framework: 

• Large energy consumers can contract with non-emitting generators anywhere in Ontario. 

• Businesses don’t need to own or host generation facilities – contracts are financial, not physical. 

• Savings come through Global Adjustment reductions and predictable long-term energy pricing. 

This marks a turning point for Ontario’s energy market. C-PPAs empower businesses to take direct control over their energy strategy, aligning financial savings with sustainability outcomes. 

Why Ontario Businesses Trust VCT Group for Solar Power Purchase Agreements 

If your business is a Class A ICI participant, you may be eligible to participate in a C-PPA. Choosing the right partner is critical when navigating Ontario’s new PPA landscape. Here’s why businesses across the province trust VCT Group: 

• Ontario-Specific Expertise 

• Deep knowledge of IESO’s C-PPA framework, the Industrial Conservation Initiative, and Global Adjustment cost structures. 

• End-to-End Support 

• From feasibility assessments to structuring agreements and navigating regulatory requirements, VCT manages the process from start to finish. 

• Proven Track Record 

• Decades of experience delivering solar solutions across Ontario, including solar carports, rooftop systems, and renewable energy contracts. 

• Local Commitment 

• As a Waterloo Region-based company, VCT is invested in helping Ontario businesses innovate and thrive through clean energy. 

Partnering with an experienced team ensures you maximize the benefits while staying compliant with Ontario’s evolving regulatory framework.