Solar Power Purchase Agreements, offer businesses across Australia an innovative way to install solar and reduce and fix their electricity costs. A PPA relieves the need for you to provide any upfront capital in accessing the benefits of solar power for your business.
With a PPA through Living Energy, the PPA Provider takes on full ownership and maintenance of the solar system on your roof. You only purchase the electricity generated by the solar system which is usually cheaper than you’re currently paying from the grid.
A Quick Snapshot of how it works :
Each month the customer is billed for the solar energy produced, as well as by their existing utility for their grid power, minus what was produced by the solar. Solar will always be cheaper.
Customers have no ongoing maintenance or operational obligations as the service is all inclusive.
The major differences between a solar lease and power purchase agreement are the duration of the arrangements and pricing model. With a PPA, you make monthly payments per unit of electricity delivered. With a lease, the payments are predetermined; regardless of how much electricity is consumed.
While both a PPA and a solar lease arrangement involve zero capital outlay; there are a number of factors needing to be considered with either option to gauge the best solution for your company or organisation. Our friendly experts at Living Energy can advise you on whether a PPA or a lease would be the better option for your circumstances.
Typically, as a customer you would receive 15-50% reductions in your grid power rates from day 1 through a PPA, depending on the current cost of power, and what term (years) are agreed to. The longer the term, the lower the payment – like a car lease
There are no upfront costs with a PPA either and thus minimal risks to you the customer. All that is being agreed upon is cheaper power for a period of time
From January 1, 2019, PPAs will have a unique position over other rental and leasing products from an accounting and taxation perspective with PPAs being the only true off balance sheet solution. Leases and rental products will no longer sit off balance sheet from this date
Given their longer term, PPAs offer the lowest effective cost of electricity with no upfront costs