POWER PURCHASE AGREEMENT (PPA) – FREQUENTLY ASKED QUESTIONS
Below you will find answers to questions and concerns regarding the Power Purchase Agreements or PPA’s. If you need further information please feel to make contact.
Nothing in life is free
You are absolutely right, nothing in life is free. Whilst there may be no capital cost to the business, you are leasing the air space above your roof to us and in return we are helping you reduce your carbon emissions and providing you with clean, green electricity produced at a reduced rate. That is the ‘Quid Pro Quo’.
Basically, you earn money by using my roof
Correct. This is the pay-back for us investing a significant amount of capital up front for a solar PV system on your roof which has no capital cost to you at all. However, our pay-back is achieved over 25 years. We are committing to a long term relationship.
So, if I sell the building for redevelopment, what happens?
If the building is being demolished and / or sold for redevelopment, there exists a mechanism through which we are able to recoup a percentage of our investment, a ‘compensation payment’. You would buy-out the system at an agreed price from the profits of the sale. It is possible that the developer could include this sum in the purchase price for the site.
What is the basis for the calculation of electricity cost inflation?
Traditionally utility companies increase electricity costs at least annually. We have to be able to forecast the most accurate inflationary rate to give you an indication of your likely savings. We use many professional tools to calculate the most accurate value and our forecasts are based on estimates provided by the Department for Climate Change (DECC). If you would like to see scenarios using varying rates of electricity inflation this can be arranged.
What happens if I subsequently get a discounted deal from my utility company?
Then you will benefit from cheaper electricity produced by the solar PV system during the day and also benefit from discounted electricity when your demand exceeds production from the system, or when it is not producing as much as you may require. You benefit all round.
Can you guarantee your rate will always be cheaper than the market rate?
We are unable to provide an assurance of this as it is incredibly difficult to guarantee what might happen in the future, albeit history tells us this is very, very unlikely. With the demand for electricity ever increasing and coal fired power stations being de-commissioned, there are pressures on the whole National Grid. Consequently, even if rates come down we expect this would be short lived.
I cannot see I will be in this building for 25 years
That is not a problem. The Lease is registered with the Land Registry and will transfer to the new owner upon transfer of title to the premises. The PPA will be transferred to the new owner who will then benefit from the discounted electricity rate and enjoy cheaper electricity. We will assume responsibility for discussions with the new owner.
plan to retire before then
Congratulations, you will be able to retire with the knowledge that you are passing on discounted electricity to your successor and that you have helped the business become more environmentally responsible. A good legacy to pass on.
I don’t believe in climate change
Climate Change is an emotive subject and there are many experts defending both sides of the argument. However, the reduction of CO2 emissions has been given continued support as recently seen at the Climate Change summit in Paris. The UK already has plans to de-commission coal fired power stations which puts more strain on our electricity generation infrastructure. Whether or not one believes in climate change you cannot argue with the benefits of clean, green renewable energy produced by solar PV.
If I wait surely the cost of equipment will be lower and production efficiency higher
As with everything in the world, technology moves on and we have seen this in cars and smaller personal technology such as TV’s, phone etc. However, development should not stop you installing solar PV, it has proven benefits and our solution allows you to benefit from discounted electricity now making immediate savings and also gaining ‘Green’ credentials. Plus, of course there is no actual capital cost to you. In addition many businesses are now choosing suppliers not simply on a cost basis, but also how environmentally responsible they are.
The PPA and Lease seem to favour you, yet it is on my roof
All of our documents have been drafted so as to provide a balanced approach for both you and us. We respect it is your roof hence, why we have a full Operations and Maintenance (O&M) contract in place and in the very unlikely event any damage is caused by our equipment to your roof / building, we are responsible for the repairs. Likewise, as I am sure you will understand, we need to protect our position, as installing this system represents a significant capital cost to us. We make all our documents readily available upfront for review by whoever you may wish. We stand by the wording on the basis that this is a ‘Partnership’ between your company and us.
Why should I use you rather than a competitor?
As with everything in life, you are free to use or purchase from whoever you consider appropriate. Whether it is a Ford or Peugeot, LG or Samsung, BT or Virgin as examples. We believe we offer the best solutions in funded PPA solar PV in the commercial sector, proven experience and satisfied customers who can give testament to the effectiveness of our partnership.
The year 1 savings do not warrant all the work involved
There is a reasonable amount of work to be undertaken to install a high quality solar PV system on your rooftop. However, the great thing for you is that we take on this work for you; there will be no disruption or inconvenience to you, or your business. The biggest thing for you, once the system is commissioned, is noting the savings from Day 1 from your discounted electricity. Our existing clients often tell us that they notice the weather more closely as the better the weather, the higher the savings.
What’s in it for me?
The satisfaction that you can save money through discounted electricity from Day 1 with no capital outlay. Plus, the addition of a solar PV system making the building more energy efficient will often result with an improved EPC rating which increases marketability and reputation of the business. You will also be able to benefit from a reduction in your reported CO2 emissions and be safe in the knowledge that the cost of your locally generated solar PV electricity is guaranteed to rise only in line with inflation.
I am very busy and this seems like a lot of work
All that is required of you is to sign authorisations and a Lease and PPA when you are ready to proceed; we take care of everything else.
- Obtain half hourly data (HHD) data from your utility company so that we are able to effectively analyse your onsite electricity consumption and therefore be able to provide you with the optimum sized system which will deliver you the greatest savings
- Seek District Network Operator (DNO) authority which confirms that we are able to connect the solar PV system to the main grid infrastructure
- Undertake a structural survey so as to ensure that your building is able to accommodate the installation of the solar PV system
- Undertake necessary planning consents, where required
- Design and project manage the system
- Install and commission the system using high quality equipment and accredited installation partners
- Monitor the system to ensure that the forecast electricity savings are achieved
- Watch your discounted electricity savings grow from Day 1 for no capital outlay
- Have access to a remote monitoring system which shows you exactly how your system is performing and is another means by which we are able to demonstrate our transparency
Why can’t I use the system linked to battery storage for increased benefit
Battery storage is a developing product and the technology will at a point in time become a viable economic option for commercial solar PV. Currently there are no readily available commercial battery storage solutions which can be combined with solar PV funding in the UK.
For further information or if you wish to discuss a Solar Power Purchase Agreements please complete the contact form.