PPAs are a popular choice among commercial and industrial consumers, owing to the fact that the installation, operations and maintenance of the system are fully covered by the solar services provider.
Most often, this funding mechanism includes insurance and performance guarantees, with the biggest advantage being reduced electricity costs from day one.
This allows business owners to enjoy the benefits of clean energy from a solar PV system installed at their premises, at no upfront cost.
“A PPA includes the installation of a fully operating solar system but removes the hassle of having to maintain, monitor, operate and clean the system for years to come. Business owners can now enjoy solar energy and the savings it will generate with zero capital expenditure or operating risks,” explains SolarAfrica Chief Investment Officer Charl Alheit.
Following the signing of a long-term agreement, a solar tariff is billed monthly, based solely on the amount of energy the business produces. This tariff increases annually at a fixed escalation, allowing businesses to accurately predict future energy costs.
“This tariff is up to 40% cheaper than the national grid, providing significant savings each month and over the lifetime of the agreement,” Alheit adds.
Businesses that use large amounts of daytime power and operate five to seven days a week are likely to generate the highest savings from this funding model.
While ownership of the solar system will remain with the service provider until the end of the agreement, business owners have the option to purchase the system during the term of the agreement.
Various exit options are available should a business owner wish to end the agreement earlier, while any damage to the solar system will be fully covered by insurance.
*Please refer to the solar cost comparison table for a full breakdown and comparison of costs between a PPA and solar system cash purchase.