Power Purchase Agreement

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Included in amongst all of the considerations when sourcing a new solar system for your business , is taking into consideration the option of a Power Purchase Agreement [PPA],  instead of traditional outright purchase.

If the thought of a capital solar investment is daunting, entering into a PPA might be a viable option for you and your business.

The PPA concept has been mainstream overseas for quite some time now, it is still quite a foreign concept her in Australia. In the most basic and simple terms, a solar PPA is an agreement for a solar company that will pay for the installation of a solar system for your business [or home] and will sell you the power it generates, at a lower rate than what you’d normally receive from your energy retailer.

As the company is basically renting your roof for a contractual period of time, thus allowing them to retain ownership of the system and the responsibility for any maintenance costs.

Generally speaking, no upfront capital expenditure is required for the creation and installation of a PPA’s solar system. The costs will be incurred by the agreed amount per kWh you will pay. This rate may be influenced by the base level amount of energy your PPA contracts you to pay for, regardless of how much you actually use.

Additionally, you will not be held responsible for the ongoing costs of maintaining the solar system. And by paying the lower rates, you your cost savings will be be immediately apparent.

We strongly recommend that before you sign on the dotted line, you read and understand the contact and all of it’s terms. In particular, look for any terms that reference fees for exiting the contract early [due to moving premises, business closing, etc].

Additionally, there should be contractual considerations for restoring the roof to its original state, once the contract is completed and the panels are removed.

Even though awareness of PPA in Australia is still relatively low, it’s a viable option for any business to consider.

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