PPA Tenor

PPA tenor is the contract length of a power purchase agreement, typically 10 to 20 years for data center supply. Longer tenors give developers price certainty and help finance new generation, while shorter ones keep flexibility if load moves. Hyperscalers have signed terms of 15 to 20 years for wind, solar and nuclear output, matching the lifetime of the campus they serve. Tenor shapes the lender view of a project: a 20-year agreement with an investment-grade offtaker can support more debt than a 5-year one. It also interacts with the tenant lease term, since a campus with a 10-year lease backed by a 20-year PPA carries a merchant-price risk for the second half unless extended.