What is a Power Purchase agreement (PPA) for Farming?
If you own a company, agricultural land or premises with lots of roof space or even land, you may have heard the term power purchase agreement or PPA.
What is a power purchase agreement?
A Power Purchase Agreement (PPA) is a long-term electricity supply agreement that is usually between two parties, a power producer or payment solutions company and an electricity consumer. A PPA usually contains the conditions of the agreement along with the agreed cost price of the supplied electricity per kWh. PPAs are frequently implemented by those who have a large consumption of electricity to help them reduce their investment costs and benefit from reduced electricity costs.
We are able to provide on-site PPAs, these are long-term electricity supply agreements, that allow the installation of solar panels on business premises without the capital outlay. Our PPA provider will then maintain the solar panels and agree to sell the electricity generated by them to your business for an agreed rate per kWh. This rate will be significantly lower than what you were originally paying per kWh from the grid.
Benefits of a power purchase agreement (PPA)
No initial capital outlay
All solar equipment installed on your premises is done so at no upfront cost to your business.
As the solar energy generated by your solar panels is locked in at a lower rate from the first day, you are protected from any future rising electricity costs.
As per the conditions of the PPA, a fully serviced solution is provided to your business, this means all operation and maintenance costs are covered so you don’t need to worry.
System upgrades included
As solar technology improves, your system can be upgraded at no cost to your business in order to help you get the most out of the solar array in the long term.
Increased building value
Having solar panels installed on your building will mean it is in greater demand, which often results in an increased building value.
How does a power purchase agreement (PPA) work?
If you’re considering a PPA for your farm or agricultural building you may be wondering how exactly a PPA works. We’ve explained below:
- When you express an interest in using our services for a PPA. First, we will scope your property to assess your organisation’s energy usage along with the needs of your business. As the current average price for grid electricity is £0.35 per kWh our PPA will help to lower this.
- Once this initial stage is completed with both parties in agreement, we can begin the installation of solar panels at no cost to your business.
- Once the solar panel system begins generating power, your business will be purchasing this power at the agreed low rate per kWh instead of paying the hefty cost of grid power, this will remain in place for the entire agreement term.
- If the solar panel system requires maintenance throughout your term this will be taken care of at no cost to your business.
Advantages of a power purchase agreement (PPA)
What are the advantages of having a PPA with Rawson Solar?
- Longer agreement terms
We are able to offer PPAs with terms of at least 30 years, the industry standard is only 20 years. This is more cost-effective as you’re saving on your per kWh rate for a considerable number of extra years.
- Greater flexibility
Our PPAs can be suited to both building owners and building tenants, they can even be tailored to suit buildings with multiple tenants.
- New revenue streams
If you’re a landlord we can help to structure your PPA to provide you with an additional revenue stream.
If you own a farm or agricultural building and are looking to reduce your electricity costs, Why not utilise your available roof or land by installing solar panels at no cost to your business? If you want to find out more about our PPAs get in touch with our team now and see how much you could be saving for your farm or agricultural business.