Policy Levers for Place-Based Decarbonization: Municipal Input–Output Evidence on On-Site and Off-Site Power Purchase Agreements (PPAs) with a Local Retail Supplier

Local governments increasingly combine power purchase agreements (PPAs) with local retail power producers and suppliers (RPPSs) to pursue decarbonization and regional revitalization. However, there is limited municipal-scale evidence on how contractual design translates into regional multiplier and employment outcomes under structural uncertainty. Using a 38-sector municipal input–output table (2015) for Fukuchiyama City, Kyoto, Japan, we conduct scenario-based simulations to quantify the output and employment multipliers of on-site and off-site solar photovoltaic PPAs. We compare Type I multipliers (household exogenous) and Type II multipliers (household endogenous) across nine scenarios that combine three PPA arrangements—off-site sales to the local RPPS [A], off-site sales to a major utility [B], and on-site self-consumption [C]—with three interregional leakage scenarios (1)–(3). A systematic sensitivity analysis (±10–20% perturbation of structural coefficients) was implemented to provide results as conditional ranges rather than point estimates. Under baseline leakage (3), off-site PPAs sold to the local RPPS [A3] yield the largest short-term total effects (1.24 million USD/year). Crucially, the error bars confirm that the policy ranking of A > B > C remains robustly invariant across all leakage conditions. Endogenizing households increases total effects by approximately 22.9% without changing this ranking, with induced effects concentrated in consumption-related services. In contrast, on-site PPAs [C] yield significantly larger long-term cumulative multipliers through stable expenditure savings from avoided electricity purchases. These results provide a transferable evaluation protocol and identify policy levers—off-taker localization, local supply chain thickening, and localized O&M—that jointly determine whether PPAs deliver broad-based regional economic benefits.