Ricans India

SOLAR Power Purchase Agreement

Solar Power Purchase Agreement

Power purchase agreements (PPAs) can be a great tool for financing solar projects, especially in the commercial market.

A solar PPA is one of several ways businesses and public entities can pay for solar.

What is a solar SOLAR Power Purchase Agreement?
A PPA is a financing arrangement that allows businesses, government agencies and educational institutions to purchase solar electricity with no upfront capital cost. You buy the energy, not the solar equipment. It’s a great way to get the benefits of solar without having to take on the responsibilities of being a solar system owner-operator.

  • Ricans pays for the cost of a solar installation on or near the customer’s facilities (like a rooftop, parking lot or unused land).
  • Ricans takes responsibility for ownership, operation and solar panel maintenance.
  • The customer simply enters into an agreement to purchase the electricity produced by the system at a predetermined rate per kilowatt-hour (kWh).
  • A typical PPA agreement might run 20 to 30 years and may include a variety of purchase and renewal options.

What are the pros and cons of solar PPAs?

There are benefits and drawbacks to solar PPAs. Pros of Solar Power Purchase Agreements

  • 1. Rs.0 capital investment: There’s usually no upfront cost involved in entering into a solar PPA.
  • 2. Immediate savings: Lower electricity bills from day one.
  • 3. Predictable energy costs - A solar PPA allows a customer to lock in low energy costs & protect their organization from unpredictable
    fossil fuel-based energy rates.
  • 4. No production or performance risks.
  • 5. No ongoing operations and maintenance (O&M) costs.
  • 6. Immediate Savings.
  • 7. Corporate sustainability: By purchasing clean, renewable energy instead of using energy generated with fossil fuels, organizations
    can make a real difference for the environment and help set an example for sustainable business practices. Cons of Solar PPAs.
  • 8. Cash is cheaper: In the long term, the customer will pay less and save more buying their own solar system.
  • 9. Longer-term obligation: The previously mentioned early buyout option notwithstanding, with a PPA, the customer is generally
    agreeing to purchase power for 20 or more years.
  • 10. No control of equipment: With a solar PPA, the customer doesn’t own the solar equipment.