May 1, 2026 · Agreements · By Kite Energy
PPA vs. ESA: Which Energy Agreement Fits Your Facility?
Both structures deliver on-site clean energy with zero upfront capital. The difference is how you pay — per unit delivered, or one fixed service fee.
Every Kite project delivers energy through one of two agreement structures. Neither requires capital from you; the difference is how the payment works and where you want certainty.
The Power Purchase Agreement (PPA)
You pay a fixed price per unit of energy delivered — dollars per kWh for power, per MMBtu for thermal. It behaves like a utility bill, except the rate is contracted for 10–20 years and typically sits below your blended utility cost. Pay only for what's metered.
The Energy Service Agreement (ESA)
You pay a fixed monthly service fee that covers the system, its output, and everything required to keep it performing — maintenance, monitoring, repairs, and guaranteed performance with make-whole provisions. One predictable line item, typically over 15–25 years.
How to choose
- Consumption varies a lot? A PPA's pay-per-unit structure tracks your usage.
- Want budget certainty above all? An ESA's flat fee is easiest to plan around.
- Not sure? A site assessment models both against your actual load data.
One more wrinkle worth knowing: the available structure can depend on your state. Third-party PPAs are authorized in some states and restricted in others, where service-structured ESAs often fill the role. Kite structures each agreement to the laws of the state and utility territory where your facility operates.
Frequently Asked Questions
Who owns the equipment under a PPA or ESA?
Kite owns and maintains the equipment for the contract term. Customers benefit from the energy without capital expenditure and are insulated from operational and technology risk. Buyout options at fair market value can be discussed at defined points in the term.
What happens if the system underperforms?
Performance obligations are contractually defined and measured. Kite is responsible for operations, maintenance, and monitoring, and our agreements include make-whole provisions if delivery falls short.
See Both Structures Modeled on Your Facility
Request a site assessment and we'll model PPA and ESA economics against your actual energy data.
Compare PPA vs ESA