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Home > Finance for Residential and Business> Business Solar Power Purchase Agreement - PPA

Finance for Residential and Business> Business Solar Power Purchase Agreement - PPA

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Business Power Purchase Agreement (PPA)

How to wind back the clock to 2015 on power prices, and lock them in for 15 years

Would you like to freeze your businesses power prices for up to fifteen years or more?

We all know power prices are trending upwards at a scary rate. For some businesses, this has the potential to price them out of the market. Why take the risk when a "Power Purchase Agreement" (PPA) may provide the solution. Also known as a Solar Power Purchase Agreement (SPPA).

How Can a PPA or SPPA Help Your Businesses Future Bottom Line?

Basically a PPA is used to freeze the businesses power KW price at an agreed amount for an agreed term of up to fifteen years or more. This price will probably be close to your current price and nearly all cases, it may even be substantially less. There will be a fixed Annual Rate Increase Cap of just 1.5% to the agreed power price (accurate at time of printing). As part of the agreement, a quality Solafied solar power system will be installed at the workplace, at no cost to the business, from which the PPA partner will supply most of, or all of the daytime power requirements. Any power consumed from the grid during the day or night over and above the solar system will be supplied and charged for by the businesses preferred supplier. The PPA does not lock your business into any particular grid supplier for any period of time. Depending on the agreed contract, at the end of the contract term, the ownership of the solar power system is transferred and becomes the property of the business at no extra cost.

In short, if you pay only 2015 power prices for the next 15 years, you will be making substantial savings and be able to more accurately budget further out.

What is so Different About Our PPA?

Yes there are some other PPAs around, however, many if not most require the business to purchase all of the solar generated power, even if it is not used! The PPAs Advantage Power organises are different, and to our thinking, a lot fairer. In our PPAs you ONLY PAY FOR THE SOLAR GENERATED POWER USED! So if you shut down a freezer for maintenance for a few days causing your power consumption to dive, it is not an issue as the business PPA power bill will reflect the reduced power consumption. All of the power flow is metered, and that is what the monthly power bill is based on. Only pay for the solar power consumed. Not for what is generated, and save.

PPA Term

The agreement term can be terminated early (conditions apply) where the solar system can be bought out at an agreed fair value if necessary. Terms can be from 7 to 25 years with options to extend. 15 and 20 years seem to be the most popular term periods at this time, though, it is up to what works best for you. During the active contract the solar system remains the property of the power seller and they maintain and continuously remote monitor the system. It is also important to note that this is a zero export system, as in, nothing gets sold back to the grid. The power buyer is responsible for anything caused by them, as one naturally would expect.

How Many Phases?

The number of phases that your business may require is not an issue as we can provide solar systems to suit. We have already completes a number of 3 phase solar power systems on PPAs for businesses such as mechanical workshops and hotels.

Solar System Quality

The power seller needs the solar system for the SPPA to be efficient and long lasting to make the numbers work. They are also a Tier 1 manufacturer, so they know what is robust. A lot of attention is placed on the Solafied installation as well. You can be sure that a quality system is being installed and that it will be monitored and looked after. The system can be remotely monitored at no cost to your business.

What is the Minimum SPPA Solar System Size?

This does depend on the site location and circumstances. However, SPPA systems can be as small as 5KW, though, a 10KW and over solar system is more likely to be approved. Usage can be calculated on a 5 day work week. Simply request an assessment to find out if we can help you save into the future.

Battery Storage

While most PPA solar systems at this time will not include batteries, there will be some businesses that may require them. We have a number of options when it comes to batteries from the almost bullet proof Nickel Iron (NiFi) batteries through to our popular compact and robust LiPO4 batteries that we prefer over Lithium-Ion (Li-ion) batteries for a number of reasons. However, we have the Lithium-Ion batteries as well. While battery prices have greatly reduced, they will still increase the PPA power price to cover them to a point where the cost vs benefit has to be assessed. The option is still there should you require it.

PPA Prerequisites

Before any agreement, there needs to be a location suitability and power requirement assessment made. This follows the completion of a short SPPA Preliminary Checklist and the signing of a Letter of Authorisation for some background checks and the collection of some power usage data for assessment calculations. The completion and return of these two documents does not commit your business to a PPA in any way. They are just for a facts and suitability assessment.

As always, it is recommended that your business seeks advice on the terms and conditions, and goes through the numbers with an accountant, even though we have tried to make the contract and information as straightforward as possible. For some businesses, it may be wiser to invest in a Solafied battery solar power system upfront with Advantage Power to potentially slash the power bills even further. We can also arrange simple finance for that option in most cases. On the other hand, many businesses would prefer to keep their funds to grow the business, and that is where the PPA comes in to play as there is no outlay to make the savings in energy.

Understandably, the PPA concept is at first difficult to get ones head around the economics of it all due to the large potential savings, no investment requirement, and the gaining of a complete solar power system (if in contract) at the end of the term, however, this is all made possible by the Tier 1 infrastructure supplier making sure that the numbers calculate out for both parties. There are numerous SPPA's in action right now via our group as you read, however, as the industry and government policies change, this opportunity may become an option of the past.

Get More Information

Even if you are still unsure how the Purchase Power Agreement (PPA) can work for your business, if you think that the PPA could save your business in future power costs, complete the form below so that an Advantage Power representative can get in touch with you to answer your questions, and to have your businesses assessed for suitability. The assessment is free and obligation free so you have nothing to lose. You will only need to complete the short and simple SPPA Preliminary Checklist, and the Letter of Authorisation.

This is a great opportunity not to be wasted as we all know how difficult it is for business to maintain a healthy bottom line with the power increases. Check this PPA option out for your business now.

Just a foot note. Advantage Power also has PPA options for residential.