A quick guide to Power Purchase Agreements

business handshake Posted on 21st Dec 2018 by Ged Ennis

Cost savings, energy security, and enhanced green credentials are just a few of the reasons commonly cited by commercial businesses to explain why they’ve chosen solar panels to fulfil their energy requirements. What’s more, customers can even sidestep the issue of upfront costs with a Power Purchase Agreement, which is often particularly helpful for small businesses and organisations such as schools. Here’s a quick explanation as to what you need to know about Power Purchase Agreements (PPAs for short), so you can get a better idea of how your organisation can benefit. 

What is a Power Purchase Agreement?

Essentially, a Power Purchase Agreement is one of several ways to pay. It’s a handy alternative to buying a solar panel system outright, allowing you to save on upfront costs while still being able to benefit from the multitude of advantages that solar power has to offer. When you enter into a Power Purchase Agreement with us here at Low Carbon Energy, we’ll install a solar panel system on your premises completely free of charge. This is financed by a third party, who is always a trusted partner of Low Carbon. Once the system has been installed, we’ll sell you the generated electricity at a discounted rate, which is generally significantly lower than what you’d normally be paying to your existing provider. 

solar panels

The Benefits of a Power Purchase Agreement

Understandably, Power Purchase Agreements have seen a steady increase in popularity in recent years here in the UK, mostly because customers stand to benefit from them in very clear, tangible ways.

No up-front or capital costs

As we touched on above, this is obviously one of the core benefits of a PPA, as it allows you to sidestep the initial costs of setting up a solar panel system. Our experts at Low Carbon will take care of all the size, procurement and installation details, so once the system is set up, you can start feeling the benefits immediately.

Increased energy efficiency and cost savings

Typical solar panel systems are able to offer energy bill savings of around 25-35%, which means huge financial savings for your business. What’s more, there are no estimated bills with a Power Purchase Agreement. Instead, the amount of energy you purchase from us within the PPA is determined by your actual usage. This allows you to further reduce costs when it comes to commercial solar, granting you total peace of mind that you’re never spending more than you need to.

Better energy security and long-term budgeting

Another major benefit of a Power Purchase Agreement is that it offers you a fixed, predictable cost of energy with smaller and steadier rises than the sharper hikes you’d find at the normal market rate. This gives you increased flexibility to budget for these price rises in future, allowing you to streamline your finances and ultimately save more money on your energy bills.

No maintenance or repair costs

As the finance and risk is taken on by our third-party partner, they also take on all responsibility for ongoing service and maintenance, which is in turn carried out by our skilled solar engineers here at Low Carbon. Therefore, you as the customer don’t take on any financial responsibility for the panels themselves – we’ll take care of everything, leaving you to make the most of all the other benefits!

Maximum green credentials

In today’s environmentally-conscious society, modern consumers are now more than ever making statements with their wallets, preferring to deal with companies who are able to actively demonstrate their commitments to the environment and green initiatives. Solar panels offer a significant and conspicuous indication of an environmentally-mindful business, potentially influencing thousands of customers to choose your business over the competition’s.

Boosts the resale value of your premises

For the most part, it’s homeowners who stand to benefit the most from this key advantage, but it’s also worth bearing in mind for businesses who may relocate at any point in future. What’s more, most Power Purchase Agreements are transferable to new tenants, which means you don’t have to worry about any lengthy red tape while sorting out the energy provision in your new premises.

Here at Low Carbon, we’ve got decades of experience in providing a market-leading service for customers across a whole range of sectors. As well as our services for general commercial premises, other examples of these sectors include manufacturing, farming and agriculture, and public sector buildings. To find out how your business can benefit, just give us a call on 08456 808 963 or email us at info@lowcarbonenergy.co. We’re here to help!

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