Grants For Non Profits (read more)
Free Solar Panels For Businesses (read more)
If you want to capitalise on the benefits of a solar PV system, but don't know where to start, help is at hand. The idea of affordable or free solar PV electricity is enticing to many firms, and the energy savings and reduced electricity bills make renewable energy so appealing to many businesses.
A solar power purchase agreement (PPA) might be the catalyst for your firm to benefit from solar electricity and a solar PV system.
A Solar PPA is a contractual agreement between a solar energy provider and a business or commercial entity. Under a PPA, the solar energy provider installs, operates, and maintains solar panels on the premises of the business. The company agrees to purchase the electricity generated by the panels at a predetermined rate over a specified period, typically 10-25 years.
Under a power purchase agreement, the business does not own the panels but instead purchases the electricity generated by the boards at a predetermined rate, often referred to as the "PPA rate" or "PPA tariff." The power purchase agreement rate is typically lower than the retail electricity rate, which allows the business to save on its electricity costs from day one.
The solar energy provider is responsible for installing, operating, and maintaining the panels, including any repairs or replacements that may arise during the agreement term. This means that the business does not have to worry about upfront costs or ongoing maintenance, making solar energy more accessible and affordable for companies of all sizes.
There are many benefits associated with a power purchase agreement, including the following factors.
One of the most significant benefits of a Solar PPA is the potential for cost savings. By purchasing electricity at a predetermined rate, often lower than retail, businesses can save on their electricity costs from the beginning of the agreement. This can result in substantial savings over the term of the PPA, allowing companies to allocate resources to other areas of their operations.
With a PPA, businesses can also enjoy predictable energy billing, as the PPA rate is typically fixed for the duration of the agreement. This gives companies budget certainty and protection against volatile electricity prices in the market, helping them better manage their cash flow and financial planning.
In addition to cost savings, businesses that enter into a Solar PPA also contribute to environmental sustainability. Solar energy is a clean and renewable energy source that does not produce harmful greenhouse gas emissions. It is a responsible and sustainable choice for businesses looking to reduce their carbon footprint and contribute to a greener future.
Another advantage of a PPA is that there are no upfront costs or upfront investments for the business, as the solar energy provider is responsible for installing and maintaining the panels and solar PV system.
This eliminates the need for companies to invest in expensive solar equipment or worry about ongoing maintenance and repairs, making solar energy a hassle-free and cost-effective solution. Most firms are happy to hear of low upfront capital costs, especially as green electricity helps maintain a company's environmental responsibility.
The developer remains responsible for maintenance costs, which means solar PPAs provide peace of mind with the power generated. You can also read our post on Solar PV vs Solar Thermal vs Solar Hybrid for more insights.
PPAs also offer businesses flexibility and scalability. Depending on the company's needs, it is possible to customise the solar PV system installation size to match the energy requirements, and additional panels can be added or removed as needed.
This allows businesses to scale their solar energy production based on their changing needs, making it a versatile and adaptable solution for businesses of all sizes.
As traditional energy sources become increasingly scarce and expensive, businesses face the risk of rising electricity costs and potential disruptions in energy supply. However, with a solar PPA, businesses can secure a long-term and reliable energy source.
By solar electricity from panels installed on their premises, companies can reduce their dependence on the grid, hedge against future energy price fluctuations, and ensure a stable and sustainable energy source for years. Knowing you aren't chained to the market price and you can enjoy a cheaper rate depending on your PPA contract term offers long-term protection, especially with a fixed-price service. A lower electricity price serves a business and its customers well.
You have options to consider when choosing who to enter a PPA with, and here are some of the factors to consider when you evaluate your PPA options.
In the United Kingdom, a solar lease and a Power Purchase Agreement are two different methods of financing and implementing solar energy systems for businesses.
Solar Lease: A solar lease is a financing arrangement where a business leases a solar energy system from a solar provider for a fixed long-term lease, typically 10-25 years. The business pays a monthly lease payment to the solar provider in exchange for using the solar panels and the electricity derived by the system. At the end of the lease term, the business may have the option to purchase the solar system, extend the lease, or have the system removed. You can also check out our post on how many solar panels do I need for more information.
The key differences between these schemes are
It's crucial for businesses to consider their energy needs, financial goals, and long-term plans when choosing between a solar lease and power purchase agreements. Consulting with a reputable solar provider and reviewing the terms and conditions of the lease or PPA agreement is crucial to make an informed decision.
Many businesses find solar PPAs offer financial savings, improved carbon emissions, and a lower electricity price, so check it out as part of your sustainable long-term outlook.
