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Commercial Blog

Free solar, zero cost green: Spirit Energy’s new Guide to Solar PPAs

Erica Charles 16 Jan 2018

According to Solar Power Portal, the latest EEVS Insight report has found that demand for solar PV among corporates remains above average, despite Brexit uncertainty impacting the wider energy efficiency sector.

This comes as no surprise to us, because we frequently see companies able to achieve a 12-20% IRR (internal rate of return) from solar PV, over the 25 year expected life of the system.

And solar PV provides a very visual statement of an organisation's green credentials. It is a technology well liked by the public and thus appealing to employees, shareholders, customers and suppliers.

Furthermore, if your organisation fits the criteria for a Solar PPA (Solar Power Purchase Agreement), you can benefit from having solar on site without paying for the system yourself. 

What is a Solar PPA?

Read on to find out more, or download our brand new (and free) Guide to Solar PPAs:

 

Guide to Solar PPAs

(Power Purchase Agreements)

 

Solar Power Purchase Agreement

 

Download now

Solar PPAs in a nutshell

A Solar PPA or Power Purchase Agreement is a long-term (20 years plus) contract between

  • an investor who pays for the installation and maintenance of a solar PV system at a site; and
  • the site owner / operator who agrees to purchase electricity generated by the solar PV system.

The purchase price of solar electricity is set at a discount to the grid cost of electricity.

Benefits of a Solar PPA

  • Free Solar PV: site owner / operator obtains the benefit of solar at no cost. The investor handles the upfront costs of sizing, procuring, installing and maintaining the solar PV system.
  • Energy Savings: The site owner is able to benefit from solar energy priced below the cost of grid electricity and start saving money as soon as the system becomes operational.
  • Reduced energy price variability: Solar PPAs provide a fixed, predictable cost of solar electricity for the duration of the agreement. The fixed cost per kWh paid for solar energy typically inflates either at a known fixed rate, or at the rate of RPI.  Both inflation rates are below expected electricity price inflation.
  • Zero cost 'green': Improved sustainability, positive CSR benefit, contribution to renewble energy target.
  • Limited risk, no maintenance costs:The developer is responsible for all installation and operating permissions, system performance and operating risk.

Eligibility criteria

A PPA is ideal for any organisation

  • owning their premises or with a long-term lease;
  • with at least 250 m2 (2500 square feet) of roof space and can accommodate a system sized at 50kWp or more;
  • with a reasonable (50,000 kWh a year plus) electricity usage and half-hourly metering in place;
  • with a good credit rating and sustainable long term outlook.

If you don't fit these criteria, it doesn't mean solar isn't right for you and it doesn't mean it can't be funded - there is other finance available e.g. the Green Business Fund, Lease finance etc. 

Why Spirit?

Spirit is a commercial solar installer. We work with several financiers and can obtain quotes for lease finance and / or Solar PPA finance. We can usually obtain three or four PPA quotes on behalf of our clients.

We installed the largest educational solar system in the UK - 634kWp at Sparsholt College in Winchester. The system was financed by a PPA agreement and the College is now benefitting from low cost solar electricity. If you are looking for a solar PPA, we'd love to help.

Sparsholt College Case Study

View case study.

Get in touch

For more information call 0118 951 4490 or request a call back:

Request a call back

or fill out our form with details of your enquiry:

Request free advice / quote 

You can also complete our Solar PPA Quick Assessment Form and we will make an initial assessment of the viability of a PPA at your premises.

Topics: Financing, Solar PV

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