Power Purchase Agreement (PPA)
PPA Agreement Suitable for large government or commercial organisations, local councils, government-backed businesses
Financier owns the system during entire length of agreement
How it works?
- No up-front cost to install the system
- Solar client is purchasing only the power generated by the system, at a set price per kilowatt-hour
- Payments for generated power may be either fixed over PPA term (usually between 10-20 years) or increased at agreed-upon intervals and rates
- Solar client may sell excess power back to the grid via Feed-in Tariff (FIT) incentives. Even in states with no FIT (such as NSW), users can still save power cost by depending on solar energy during peak rate periods.
- At the end of contract, three options:
- Purchase system at fair market value
- Extend term in five-year increments at negotiated PPA rate
- Request that system be removed
How you benefit?
- No upfront capital investment, hence no impact on balance sheet
- Save on power cost: Purchase electricity at a low, set or an inflation-adjusted rate - insulates your business or government organisation against steadily rising electricity rates from utility companies.
- Easy budgeting and long-term expense planning
- Government incentives add to cost efficiency
- No maintenance obligation; no performance or operational risk
- End of contract flexibility: purchase system, extend PPA, or have system removed