Solar Power Purchase Agreement (PPA)
What Is Solar Power Purchase Agreement?
A Solar Power Purchase Agreement (PPA) is a financial arrangement where a third-party developer takes care of designing, permitting, financing, and installing a solar energy system on a property, often with little or no upfront cost to the customer. Under the agreement, the customer purchases the solar power generated at a fixed rate, typically lower than local utility rates. This helps the customer save on electricity bills, while the developer earns income from the electricity sold and benefits from tax credits and other incentives. The agreement usually spans 10 to 25 years, during which the developer is responsible for maintaining and operating the system. Once the PPA contract ends, the customer can choose to extend the agreement, purchase the solar system, or have it removed.
Solar Power with No Upfront Costs: How It Works
Looking to lower your business electricity bills while enhancing your green credentials? With our Solar Power Purchase Agreement (PPA), there’s no upfront cost to install a solar system on your property. We handle everything from installation to maintenance, and you only pay for the electricity the system generates. This renewable energy is not only 100% green, but it’s also cheaper than electricity from the grid, helping your business meet its sustainability goals without impacting your budget. For companies in Ireland aiming to boost their corporate social responsibility (CSR) and save on energy costs, our Solar PPA is the ideal solution.
How Does Our Solar Power Purchase Agreement Work?
To benefit from our Solar Power Purchase Agreement (PPA), your business should have an annual electricity expenditure of at least €30,000. This solution allows us to rent a portion of your roof space for a contract period of 15 to 20 years. During this time, we install a solar PV system at no upfront cost to you and sell the electricity it generates at rates 5-20% lower than the prevailing grid prices.
We handle all installation and maintenance expenses, ensuring you enjoy the benefits of renewable energy without any operational concerns. Once the contract ends, we gift the solar system to you at no additional cost, allowing you to continue reaping the benefits of clean energy for years to come. This solution is ideal for businesses across Ireland looking to reduce electricity costs and improve their corporate social responsibility (CSR) by utilizing green energy solutions.
This type of agreement suits a wide range of industries, offering long-term savings and contributing to your sustainability goals.
Key Benefits of Solar Power Purchase Agreements (PPAs) For Businesses
Zero or Low Upfront Costs: One of the most attractive benefits of a Solar PPA is that businesses can adopt renewable energy with no or minimal upfront investment. The solar developer takes care of all initial costs, including the sizing, procurement, and installation of the solar PV system. This allows the host customer to start saving on energy costs immediately once the system becomes operational, without worrying about the financial burden of an upfront capital outlay.
Significant Reduction in Energy Costs: Solar PPAs offer a reliable, fixed electricity rate, providing businesses with cost stability over the term of the agreement. There are two common pricing structures for PPAs:
- Fixed Escalator Plan: The price increases at a predetermined rate, typically between 2-5%, which is often still lower than the projected increase in utility prices.
- Fixed Price Plan: The price remains constant throughout the duration of the agreement, offering greater savings over time as utility rates inevitably rise.
Minimized Risk: Since the solar developer is responsible for both the system’s performance and operational risks, the customer is safeguarded from technical issues and maintenance concerns, ensuring hassle-free energy production.
Better Utilization of Tax Credits: Developers are usually in a better position to leverage available tax credits, such as the Section 48 Investment Tax Credit, which reduces the overall cost of the system. This is especially beneficial for public entities, such as municipalities, which cannot directly access these tax benefits.
Potential to Increase Property Value: Installing a solar PV system can enhance the value of a commercial property. Additionally, since PPAs are long-term agreements, they are transferable with the property, allowing the customer to boost their property’s market value without upfront costs.