Solar Power Purchase Agreements, or PPAs, have existed in other countries for some time now, but are still relatively new to the Australian market. If this is your first time reading about Solar PPAs, here is a quick list of Frequently Asked Questions to help you learn more about them and what they can do for you or your business.
What is a Solar PPA?
Solar Power Purchase Agreements or PPAs are an agreement between a client and a Solar PPA provider. The Solar PPA provider operates and maintains a solar panel system at the client’s premises at no upfront cost to the client. The provider handles everything from the design of the system to the cost of the equipment and labour. The client pays for the electricity generated by the system.
What can a Solar PPA do for me?
While solar energy, by itself, is definitely a cheaper alternative to traditional sources of electricity, installing a solar power system requires a considerable amount of initial capital.
Adding to that, the cost of maintenance and future upgrades should your energy needs increase over time, ongoing costs can be a challenge for small businesses.
With a Solar PPA, you don’t have to worry about ongoing costs, as the provider carries this burden. This allows you to divert the funds that you would have otherwise spent on installing and maintaining a solar power system to other parts of your business.
How much can I increase my cash flow from getting a Solar PPA?
Aside from the amount of money that you avoid spending on the design, installation, operation, and maintenance of a solar power system, you will also be able to get electricity at a cost considerably lower than what you pay from the grid, and since Solar PPAs usually come with fixed price escalation, you also get additional savings (and protection) from price increases over time.
The exact amount of additional cash flow that you can gain will depend on the specific energy requirements of your business. To get a clearer idea of exactly how much you can increase your cash flow by from signing up for a Solar PPA, we encourage you to contact our sales team so they can give you a custom quote based on your unique needs.
How long do Solar PPAs last?
Solar PPAs typically last between ten to twenty years. After that, you have the option to either extend the contract, purchase the system from your provider, or pay for it to be removed from your premises. During the fulll term of the agreement, the provider is fully resposnible fo the maintenance and operation of the system.
Is solar energy really sustainable?
Yes. Because solar energy relies on the sun to generate energy, it’s essentially an infinite source of energy as opposed to traditional sources like fossil fuels which are finite and require extraction and generation processes that are detrimental to the environment. When you sign up for a solar PPA, you are not only helping your business increase your cash flow by reducing what you spend on energy costs, you are also helping the environment by reducing your carbon emissions. As for the solar panels themselves, fortunately there are recycling and reuse options to help mitigate waste outcomes. Check out our article on solar PV recylcing for more information.
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Gaertner, Ryan. “Solar vs. Traditional Energy in Homes.” Solar vs. Traditional Energy in Homes, Stanford University, 9 Nov. 2015, large.stanford.edu/courses/2015/ph240/gaertner1/.