What is an on-site Solar Power Purchase Agreement (PPA) and How Does It Work?
In a world where energy costs are unpredictable and sustainability is more crucial than ever, businesses are seeking innovative solutions to power their operations efficiently and responsibly. Enter the Solar Power Purchase Agreement (PPA), a game-changing opportunity that allows companies to harness the power of the sun without the exorbitant upfront costs or maintenance headaches.
So what exactly is an on-Solar Power Purchase Agreement (PPA)?
An on-site Solar PPA is a long-term contract where a solar developer installs and maintains a solar energy system on a property at little to no upfront cost to the customer. The customer then purchases the electricity generated by the system from the developer at a fixed, and almost always lower, rate than the local utility's rate for the duration of the contract (typically 15–25 years). This allows businesses to benefit from cheaper, green energy without the financial risk or maintenance burden of ownership.
OK, well, how does it work?
A solar company, like Wewise, designs, installs, and pays for a solar PV system on a customer's property at no upfront cost to the client. The customer then buys the electricity produced by the solar panels from the company for a set price per kilowatt-hour (kWh) over the course of a long-term contract. This ensures that the power purchased remains at a set price, meaning it is almost always lower than the grid prices. Additionally, any energy not used on-site is sold back to the grid, creating an additional source of income. The PPA provider is responsible for the system's maintenance, repairs and general upkeep over the course of the agreement; the business simply reaps the benefits. At the end of the contract, the system is typically transferred to the customer for a negligible fee, in some cases, such as with Wewise, for as low as €1.
Key benefits of the relationship
There are many benefits to this arrangement for companies of all sizes! The agreement guarantees cost savings on bills and a fully maintained solar PV system, with next to no hassle for the clients; everything is taken care of by the PPA provider.
Specific benefits of the arrangement include:
No upfront cost: Customers avoid the high capital expenditure of purchasing and installing a solar system.
Reduced electricity costs: The fixed price is almost always lower than the rate from a traditional utility, providing predictable savings.
Sustainability: Businesses can meet their sustainability goals and reduce their carbon footprint.
Cost certainty: The fixed rate locks in energy costs, hedging against future utility price increases.
Risk reduction: The PPA provider assumes the risks associated with system performance and maintenance.
So, where do I look if I want to benefit from this? Introducing Wewise Financing
Recognising the growing demand for reliable financing solutions, Wewise took the initiative to survey over 2,000 commercial and industrial business leaders. The feedback was clear: businesses are seeking trusted partners for their solar investments. In response, Wewise introduced its in-house financing solution, Wewise Financing, designed to strengthen our relationships with customers across Ireland, France, and the UK.
This offering provides companies of all sizes with a minimum 15-year on-site PPA, culminating in the transfer of the installation for just €1. Beyond stabilising electricity costs, Wewise Financing supports businesses eager to embrace solar energy but facing budgetary constraints. As local solar experts, our dedicated teams are committed to guiding you through every phase of your solar journey, ensuring a seamless experience from start to finish.
As businesses navigate the complexities of the energy transition, embracing a Solar PPA offers a strategic advantage. It's not just about cost savings or environmental impact; it's about future-proofing your operations in an increasingly complex and evolving energy landscape.
Other PPA options that can be explored include corporate PPAs and utility-scale PPAs. Corporate PPAs, such as the ones provided by our local Irish company Flogas, involve businesses purchasing renewable energy directly from off-site solar projects, allowing businesses to support clean energy and achieve sustainability goals without installing panels on their property. Utility-scale PPAs typically involve large contracts between utilities and solar developers to supply electricity to the grid, benefiting communities with renewable power at competitive rates. These alternatives provide flexible options for entities to access solar energy beyond traditional on-site installations.
The journey to solar energy is more than a financial decision; it's a commitment to innovation and resilience. By partnering with experts like Wewise, businesses can confidently step into a brighter, more sustainable future, knowing they have a reliable ally in their corner.