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Frequently Asked Questions

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1.Is solar PPA worth it?

Yes! By choosing a PPA, you can access solar power without making any upfront investment. PPA experts like Cosmic take responsibility for developing, financing, installing and maintaining the solar plant. Apart from making significant cost-savings on electricity, you get rid of the unpredictability quotient from your electricity bills in the long-term!

2.Is Cosmic offering Solar PV project services within the power purchase agreement?

Yes, Cosmic develops, deploys/ constructs, and maintains the solar system during the lifetime of the PPA.

3.Does Cosmic’s PPA come with a price or performance guarantee?

There are two types of guarantees provided in a PPA contract:
  • Minimum production guarantee, pertaining to the amount of electricity that will be generated by the plant year-on-year; and
  • Price guarantee, ensuring that the client pays a fixed price with a fixed escalation rate during the lifetime of the project

4.What are the tax benefits for businesses choosing a PPA?

As per the current regulations in South Africa, any potential tax incentives associated with developing the solar plant are provided to the owner of the plant. In a PPA, the plant is developed and owned by the developer, who is therefore eligible to receive the benefits for it.

5.Do solar PV panels need maintenance?

Yes, O&M of the solar PV project during the term of the PPA is the responsibility of the developer (Cosmic) and will be undertaken at no additional cost to the client. In the rare occasion of a malfunction or part failure, it will be taken care of by the developer.

6.Who owns the system during and after the end of the PPA term?

As part of the standard agreement, the developer (Cosmic) owns the system during the lifetime of the PPA. At the end of the contract period, the solar plant can be purchased by the client at a pre-agreed price, or the PPA can be extended at a mutually agreed tariff for the remaining life of the PV project.

7.What’s the difference between a PPA and leasing the solar PV system?

To lease a solar PV system, businesses have to pay a monthly fee. With a PPA, the client pays per kilowatt-hour for the energy produced by the plant.

8.What is the standard life of a PV project?

The average life of a PV plant is 25 years.

9.What are the standard tenures for which PPAs are offered?

The standard tenures are 20, 15 and 10 years. A longer tenure is more likely to ascertain better solar tariffs and higher savings for the client.

10.What happens to existing PPAs if the customer moves to a new facility or location?

All relocation of Solar Power Generating Facility, if required by the client, will be undertaken by Cosmic, the cost of which will be borne by the client together with any losses in revenue and any potential shortfall in production by the plant due to the relocation.

11.What if the client does not need the electricity produced by the solar plant for a certain period of time?

The client is required to buy and pay for all the electricity being produced once the PPA is signed.

12.What if solar technology gets obsolete when a business has signed a long-term PPA for 20 years?

Since the PV plant is managed by the developer (Cosmic) during the lifetime of the PPA, under the standard agreement, the client is provided performance and price guarantees, and any potential or possibility of the technology becoming obsolete would not affect them.

13.Why does the business still need to be connected to the power grid?

For times when the solar energy production is low – such as during the night and the days when there is insufficient sunlight – businesses can access uninterrupted electricity from the power grid. In case of an off-grid solution, the solution will be designed in such a way that the client would no longer need to be connected to the power grid to manage their electricity needs, making them largely energy-independent.

14.What is net-metering?

Net-metering refers to receiving credits as users of solar PV systems for the electricity added to the grid or provider (ESKOM/ Municipality). The rules for net-metering are different for the various ESKOM tariff plans and individual municipalities. When Cosmic designs a PV plant for your location, it takes into account the net-metering regulation applicable to you to maximize your savings.

15.Can the solar PV plant produce more electricity than what is needed by the business and sell the remaining to ESKOM/ Municipality?

As per the current electricity regulations, the client needs to be the net consumer of the electricity being produced.

16.What is peak/ off-peak?

It refers to the period of time when energy demand and price is high (peak) or low (off-peak).

17.The client is in agreement with the proposal shared by Cosmic. What next?

After the agreement is accepted and approved, the following steps will be undertaken by Cosmic:

  1. Site/ plant visit and detailed feasibility study – detailed technical studies will be carried out, which include site visit, energy load flow studies, fixing detailed technical parameters, etc.
  2. Detailed proposal – submission of a detailed techno-commercial proposal and PPA or purchase Contract
  3. PPA/ Contract signing – while we wait for the registration process to be complete, the PPA will be negotiated and signed
  4. Project registration with NERSA and ESKOM
  5. Necessary permits, solar installation and commissioning

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