In today’s solar industry, renewable PPAsare becoming increasingly prevalent. However, you’re undoubtedly wondering how PPAs operate and also why more firms are opting for the perks they provide. Let’s go through the basics of PPAs and the advantages they offer so you can decide if they’re right for your company.
What is a PPA?
A PPA or a power purchase agreement is a contract between your business and an energy supplier that allows you to use renewable electricity at your site. At no expense to you, your energy provider develops, builds, and manages a solar power system at your site. In exchange, you pay a set energy rate for the duration of the PPA contract, which is usually around 20 years.
What Is a PPA and How Does It Work?
Your solar supplier controls the solar system whenever you sign a PPA contract. You compensate your supplier to consume the electricity generated by your solar system. Your photovoltaic provider will provide support and maintenance services to guarantee that the system continues to function effectively for the duration of the PPA contract.
Your supplier, on the other hand, obtains any solar financing help, such as tax breaks, smart meter programs, and other incentives, that is required to meet the system’s construction expenses.
PPAs are similar to solar leases in that they work in the same way, but there are several distinctions. With a renewable lease, your regular payments are used to lease the solar power system. With a photovoltaic PPA, your regular payments are used to purchase the electricity generated by the solar system rather than the system itself.
You may be wondering, “Are solar PPAs a decent bargain?” after studying all of these facts regarding long – term power purchase. Yes, they’re an excellent value for business solar customers and want to save cash on their electric costs but don’t want to buy a system outright.
Advantages of a PPA
PPAs are becoming more popular as a result of the benefits they provide, which include:
Electricity rates that are set in stone
The current energy market is beset by variable costs, making long-term energy budgeting problematic. You and your electricity partner seal in a fixed power rate with a PPA, allowing you to better estimate energy costs in the short and long term. You shouldn’t have to worry regarding unexpected energy costs or the financial risk associated with traditional sources of energy since you commit to a set price up front.
A wider range of options
In terms of traditional energy suppliers, you’re probably to have only one option in your area—maybe two if you’re lucky. As a result, it’s difficult to maximize your selections and discover the greatest deal. With a PPA, you may shop around for the best pricing and locate a solar energy partner prepared to negotiate. You’re usually sourcing a PPA through a private company, so you won’t have to cope with the limits of a regular utility provider. You may investigate your options and pick the partner that best matches with your productivity goals since you have more possibilities.