Independent power producers (IPPs) are private entities that own and/or operate facilities to generate electricity and then sell it to a utility company, central government buyer, or end users. IPPs may be privately held entities, cooperatives, or even non-energy producing entitles capable of feeding excess energy into the system. IPPs invest in generation technologies and recover their cost from the sale of electricity.
IPPs’ inclusion in an energy market increases competition in that region, which lowers the cost of electricity for consumers. Replacing fossil fuel-powered plants with renewable energy helps balance the energy market.