A Power Purchase Agreement (PPA) is a long-term contract between an electricity generator and a buyer, typically a utility, business, or government entity. The agreement outlines the terms for purchasing electricity at predetermined rates over a set period, often ranging from 10 to 25 years. PPAs are commonly used to finance renewable energy projects, such as solar or wind farms, by providing a stable revenue stream to developers. This arrangement helps buyers secure a reliable source of clean energy at predictable prices, while also supporting the growth of sustainable power generation. PPAs can be physical (energy delivered via the grid) or virtual (financial settlement based on market prices).