Pay-as-produced vs baseload PPA

Two PPAs can share the same plant, the same term and the same headline price and still be completely different deals. The difference is usually the volume structure: how much power the buyer takes, and when. The two most common structures are pay-as-produced and baseload. A third, pay-as-consumed, is also used. This guide explains how each one works, who carries which risk, and why the choice moves the price.

Pay-as-produced

In a pay-as-produced PPA the offtaker takes everything the plant produces, when it produces it. If the sun shines at noon, the buyer receives a lot of power at noon. If the wind drops for a week, the buyer receives very little that week and has to buy the rest in the market.

For the producer this is the simplest structure. It sells its actual output and does not have to promise a shape it cannot control. For the buyer it means taking on the uncertainty of the weather and the fact that the plant’s hours rarely match the hours the company uses power.

Pure pay-as-produced volume can be hard to sell to a single buyer, because few companies consume in the same pattern as a solar park or a wind farm. That is one reason multi-buyer PPAs are gaining ground: several buyers share one production agreement, and together they absorb the plant’s profile.

Baseload

In a baseload PPA the buyer receives a fixed amount of power in every hour, regardless of the weather. The volume is a flat band. Because a solar park or a wind farm cannot produce a flat band on its own, someone has to fill the gaps and absorb the surplus. That is the producer, or a supplier acting on its behalf, buying power in the hours the plant falls short and selling it in the hours the plant produces more.

For the buyer, baseload is easier to plan with. It looks much more like a normal supply contract. For the seller, it means taking on the risks that pay-as-produced leaves with the buyer, and the price reflects that.

Pay-as-consumed

In a pay-as-consumed structure the buyer pays for the power it actually uses. The seller then has to follow the buyer’s consumption rather than its own production, so the profile risk sits with the seller.

The four risks, and who carries them

Almost every PPA negotiation comes back to four risks. The volume structure decides who holds most of them.

1. Profile risk (shape). Production does not follow consumption hour by hour. In pay-as-produced, the buyer carries it. In baseload, the seller does.
2. Volume risk. The weather does not deliver the expected amount. In pay-as-produced, the buyer gets less power and buys the rest in the market. In baseload, the seller has to buy the missing volume to deliver the band.
3. Balancing risk. The forecast is wrong and the system operator charges for the imbalance. Who carries it is a separate clause in the contract, and it is worth agreeing explicitly in either structure.
4. Cannibalisation. The more solar and wind is built, the lower the price the existing solar and wind achieves, because they all produce at the same time.

Why the prices differ

A seller never gets the baseload futures price for its power. A PPA price is built roughly like this:

PPA price = baseload futures price − capture discount − volume-risk discount − price-risk discount − cannibalisation discount + value of guarantees of origin

The key number is the capture rate: the average price a plant actually achieves, divided by the baseload price. Solar produces when all other solar produces, so its power is worth least when there is most of it. In the large European markets the capture rate for solar has fallen to about 50 to 60% of baseload. Wind usually has a higher capture rate, but it drops in windy winter periods.

A pay-as-produced price therefore sits below a baseload price for the same plant, and the gap is larger for solar than for wind. The discount is not a penalty. It is payment for the profile and volume risk the buyer takes over.

Where prices stood in early 2026

LevelTen’s European index gives a sense of the price level by technology. These are European averages, not Nordic quotes, and they move every quarter.

Solar prices have now fallen for five quarters in a row. The reason is lukewarm demand, not that solar power has become cheaper to produce: buyers have become wary of negative prices and cannibalisation.

Negative prices change the maths

Negative prices occur when green production is higher than consumption. In Denmark, solar can cover 20 to 30% of consumption in the middle of a sunny summer day, and the number of hours with a negative price rises year by year.

In a pay-as-produced deal those hours hit the buyer directly, because that is exactly when the plant delivers the most. The contract has to say what happens: does the seller still receive the fixed price, or does settlement stop at zero? The answer can matter as much as the headline price, and it is one of the most common dealbreakers in a solar PPA.

Batteries and hybrids narrow the gap

A hybrid PPA combines production with storage, or several technologies such as solar and wind. A battery lets the plant deliver outside the hours when the sun shines, which smooths the profile and dampens cannibalisation risk. European companies increasingly choose hybrid PPAs over pure solar, even at a price premium, because the power is worth more to them. In practice a hybrid moves a pay-as-produced deal closer to the shape a buyer can use, without the seller having to promise a full baseload band.

Hourly matching makes the shape visible

The GHG Protocol has proposed that market-based Scope 2 reporting should match renewable power to consumption hour by hour, not just over a year. If that is adopted, the profile of a PPA becomes a reporting question as well as a price question: the hours a plant covers will count, not only the total MWh.

Symbolon already scores every match this way. For each offer, it estimates how much of a buyer’s consumption falls in the hours the plant produces, so the difference between a solar, a wind and a hybrid offer is visible before anyone talks price. See how Symbolon works for buyers.

Questions to ask before you choose

Which structure fits depends on the parties, their balance sheets and how they use power. These questions help frame the discussion:

• How closely does the buyer’s consumption follow the plant’s production, hour by hour?
• Who is better placed to manage the gaps: the buyer, the producer, or a supplier in between?
• What happens in hours with a negative price, and who carries balancing and curtailment?
• Would a hybrid plant, or a share of a multi-buyer deal, give a better fit than a single technology?
• Do the guarantees of origin follow the power?

For the wider picture, read how a PPA works in Denmark and corporate PPAs in the Nordics.

Where Symbolon fits

Symbolon is a marketplace and broker for PPAs in Denmark, Norway, Sweden and Finland. Producers list solar, wind, hydro, biogas and storage projects; buyers describe what they need. Listings carry no names, every match is scored hour by hour, and Symbolon makes the introduction when both sides are ready. Browse the market, see how Symbolon works for developers, or book a 30-minute call.