Finance
An offtake agreement is a contract between a power producer and a purchaser (off-taker) for the sale and purchase of future energy output from a project. The most common form is a Power Purchase Agreement (PPA), where, for example, a solar farm agrees to sell electricity to a utility or corporate buyer at a predetermined rate for a set term (like 15 or 20 years). Offtake agreements provide revenue certainty for project developers, which is crucial for securing financing. They can also include contracts for differences or feed-in tariffs as forms of offtake. Essentially, the off-taker commits to buy the energy (or sometimes just the renewable attributes) which assures the project of a steady cash flow.