Corporate Power Purchase Agreements (PPAs) have become one of the most effective tools for organizations aiming to decarbonize while controlling their energy costs. Yet, despite their growing adoption, Corporate PPA negotiations between solar developers and corporate offtakers often go off track.
Most offtakers entering these agreements are new to energy contracts. They’re used to buying electricity from utilities, not structuring multi-year commercial relationships. The result? The process quickly turns messy, slow, and emotionally draining for everyone involved.
The truth is, problems rarely come from the clauses themselves. They come from how negotiations are handled. The biggest risks hide not in the contract text, but in the process that creates it.
Here are the seven hidden traps I’ve seen most often in Corporate PPA negotiations — and how to avoid them before they drain time, momentum, and trust.
1. Opening legal negotiations before finalizing commercial
There’s a temptation to “get the lawyers talking early,” but this usually backfires. When legal reviews begin before the main commercial points are locked in — price, volume, contract term, escalation, termination — the discussion quickly becomes circular.
Lawyers debate definitions, risk allocation, and drafting details, while the parties still don’t agree on the basics of the deal. The negotiation loses its anchor. Commercial managers get frustrated because progress is invisible, and legal teams grow defensive because they’re being asked to negotiate something that keeps changing.
The solution is simple but critical: commercial first, legal second.
Get a clear handshake on the fundamentals — price mechanism, term, allocation of production, site responsibilities — and document them in a term sheet or letter of intent. Once those points are aligned, legal reviews gain direction. Clauses suddenly have context, and each side can focus on risk management instead of redrafting commercial principles.
A solid commercial foundation is what keeps the entire process structured. Without it, you’re just editing a moving target.
2. Entering legal reviews without a preliminary award
Another classic trap is diving into full-scale legal negotiation without a preliminary award or mandate. If the client hasn’t formally indicated that your proposal is preferred, you’re still competing. And in that position, they have no urgency to close.
The result? Endless redlines. The client “tests” clauses with you while collecting free insights to strengthen their position with other bidders. Legal meetings multiply, but decisions never come.
You should never invest deeply in legal drafting without a clear signal of commitment. That can be a preliminary award letter, a shortlist confirmation, or even an internal approval to proceed with your draft as the baseline. It doesn’t have to be binding — although it helps — it just needs to clarify that you’re negotiating in good faith as the preferred partner.
This simple step changes everything. Once a client gives you that acknowledgment, the tone shifts from exploratory to constructive. Both sides have skin in the game, and the pressure to conclude replaces the temptation to delay.
3. Mixing legal with technical discussions
Corporate PPAs cover three distinct dimensions — commercial, technical, and legal — and each requires different people, language, and pacing. Mixing them is one of the fastest ways to lose control.
It happens all the time: a legal meeting drifts into solar system design, metering points, or grid connection details. The lawyers tune out, the engineers get defensive, and the discussion goes nowhere.
The smarter approach is to run separate workstreams. Keep technical annexes — drawings, operational procedures, performance guarantees — in a parallel track, with engineers and O&M teams. Let commercial leads manage price mechanisms, escalation, and indexation. Then reserve legal calls strictly for contract interpretation and risk.
This structure accelerates everything. Each stream moves faster because it’s handled by the right people. More importantly, it prevents technical or operational issues from blocking legal closure. When these domains are kept apart, the negotiation stays focused and progress is measurable.
4. Adding new issues at every round
Few behaviors kill momentum like clients raising new concerns at every meeting. Each time it happens, previously closed points are reopened, and everyone must revisit ground already covered. The process stretches endlessly, and frustration builds on both sides.
This trap often comes from poor internal coordination on the client’s side — different departments reviewing drafts independently, with no consolidated feedback. The fix lies in discipline and structure.
From the first review, insist that all concerns are raised at once. Ask the client to circulate the draft internally and send a single, consolidated list of comments. Then make it clear that each subsequent round will only address unresolved items.
This approach doesn’t just speed things up — it changes the culture of the negotiation. It signals that your team is professional, organized, and respectful of everyone’s time. Over time, clients mirror that discipline, and your negotiations become more predictable.
5. Running negotiations without agreed milestones
When there’s no agreed calendar, time becomes elastic — and that’s when deals die quietly. Internal reviews take weeks, signatures “wait for next quarter,” and priorities shift. You look back three months later and realize nothing has moved.
Negotiations need a shared roadmap. At the very beginning, propose a timeline with clear milestones for rounds of comments, consolidated feedback, final draft review and target signature date.
This simple framework turns an open-ended conversation into a process with accountability. Even if dates slip, having a baseline allows you to reset expectations quickly.
Clients appreciate it more than you think. It shows professionalism, it helps them organize internal reviews, and it prevents the deal from getting lost in competing corporate priorities.
6. Splitting responsibilities without a single lead negotiator
Many solar developers underestimate how important it is to have one person leading the entire negotiation. When the legal team handles contract clauses, the technical team answers specs, and the commercial team talks pricing — but no one consolidates positions — contradictions are inevitable.
Clients pick up on this immediately. They’ll exploit inconsistencies to buy time or extract concessions. “But your legal team said something different last week”, and suddenly you’re negotiating against yourself.
Appoint one lead negotiator. Her job is to integrate all internal inputs — commercial, legal, and technical — and speak with one consistent voice. This doesn’t mean she answers every question directly, but she controls the message and the timing.
A single lead negotiator ensures alignment, maintains credibility, and gives the client confidence that they’re dealing with a coherent counterpart. In complex corporate deals, that’s worth as much as the price itself.
7. Bringing the lawyer too early to the table
Legal expertise is critical, but timing matters. Bringing external counsel directly into the negotiation room too early sends the wrong signal, especially when the offtaker has little experience with PPAs.
Suddenly, what was an open constructive discussion turns defensive. The client becomes cautious, avoiding commitment until “their lawyer reviews it.” Every sentence starts with “subject to legal,” and momentum disappears.
Keep lawyers as strategic advisors, not first responders. Involve them from the start in document preparation and strategy discussions, but keep them behind the scenes until the discussion reaches specific legal matters. That way, they can protect your interests without intimidating the client or escalating tension too early.
When the time comes to bring them in, make it deliberate: “We’ll now bring our counsel to finalize the legal drafting.” It frames their role as a closer, not a blocker.
Bonus: Letting the lawyer lead the negotiation
Even worse than bringing counsel too early is letting them take over the entire process. When that happens, the conversation shifts from creating value to eliminating every risk.
Lawyers do their job — they protect. But left unchecked, that instinct can suffocate commercial logic. Clauses grow longer, deadlines vanish, and the relationship turns adversarial. You may end up with a perfectly safe contract, but no project to apply it to.
Commercial teams must own the negotiation. Legal should advise, challenge, and protect, but not lead. Deals are about trust, not just clauses. The best contracts are the ones that are fair, balanced, and executed — not the ones that sit unsigned because everyone tried to win every paragraph.
Corporate PPA negotiations are demanding. They blend commercial, engineering, and legal — three worlds that rarely speak the same language. Yet the biggest challenges are procedural.
Most delays, frustrations, and lost opportunities stem from how the process is managed. When sequencing is clear, milestones are defined, and a single lead negotiator keeps everyone aligned, negotiations regain structure and purpose. In the end, successful Corporate PPAs come from disciplined collaboration where each step is clear, timing is respected, and trust is built through consistent progress.