What is a PPA?
What is a PPA?
A solar power purchase agreement, also referred to as an SPPA or a PPA, is an energy alternative that allows businesses to access solar power without bearing the burden of setting up, operating and maintaining the solar system on their own. It is an agreement signed between a developer like Cosmic and a client that is looking for a clean and affordable source of electricity.
PPAs transfer the responsibilities associated with project development, permits, financing, installation, maintenance and the like, to the developer. The benefits of solar â cost-effective, renewable energy â continue to be extended to the client to help them meet their sustainability goals.
Benefits of PPA
- No upfront investment
- Minimum techno-financial risks
- Buyer is only committed to buy electricity produced
- Electricity cost stability and predictability in the long term
- Corporate focus on running their core business
- Easy asset transfer and ownership during, and at the end of, the term of agreement
Features of PPA
Types of PPA:
On-site PPAs
This PPA involves the installation of the solar PV system within the premises on site, and the client is billed for the power that the PV system generates. This is a less expensive alternative to the aggregated electricity procured from other sources such as the local municipality or ESKOM.
Benefits:
- The project developer installs and manages the entire system during the lifetime of the PPA at no additional cost to the client
- It is suitable for businesses of any size
- On-site plant ensuring good visibility
- Minimum energy supply guaranteed
- Reduce grid dependency
How does an On-site Grid-Tied Solar PPA work?
Off-site or Virtual PPAs
Not all businesses have sufficient physical space within their premises to deploy a solar plant; and there are some businesses which are very energy-intensive, with a high energy consumption. The virtual off-site PPA solution caters to both these categories of clients, helping them meet their energy requirements by sourcing electricity from solar farms located elsewhere. The mechanism by which the electricity is transferred to a distant location is referred to as âwheelingâ.
Benefits:
- Ideal for clients with insufficient space on their premises to set up a plant which can meet their energy requirements
- All the benefits listed under the standard PPA
How does an Off-site Grid-Tied Solar PPA work?
Hybrid Solar PPA
This PPA involves the installation of the solar PV system within the premises along with other alternate sources of energy such as battery storage, gas etc. This Hybrid solution ensures zero interruption of power despite load shedding and helps in peak-shaving.
Benefits:
- Uninterrupted power supply during load shedding
- Optimized energy consumption
- Savings on peak time power prices
- Similar benefits as on-site PPA
How Hybrid Solar PPA works?
