Power Purchase Agreements & Commercial Solar Installation
Since 2010
POWER PURCHASE AGREEMENT (PPA)
WHAT IS A POWER PURCHASE AGREEMENT (PPA)?
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Anglia Solar and its partners can facilitate a Power Purchase Agreement (PPA) in order to supply you with clean green energy which you can use just as you would draw energy from the grid. It is a contract between an electricity generator (us) and a power purchaser (you). We install green energy generation technology (by example solar panels) - these can be on-site, on your premises and also off-site from your premises - and in this agreement, the generator (us) agrees to sell a specified amount of electricity to the purchaser (you) at an agreed price for a set period of time. PPAs are commonly used in the renewable energy industry to facilitate the development and financing of renewable energy projects. You can pay for the energy without paying for the solar panels.
PPAs reduce the financial risks associated with developing renewable energy projects as you would not be responsible for funding the project. This is the responsibility of the generator. Your responsibility would be to agree a price per kWh of energy supplied and the period over which the energy will be available to you.
Additionally, not only is the financial risk to you substantially reduced but Power Purchase Agreements can help power purchasers (you) meet your sustainability goals and requirements by providing access to clean, renewable energy sources.
Overall, Power Purchase Agreements play a crucial role in the transition to a more sustainable energy future by enabling the development of renewable energy projects and facilitating the adoption of clean energy sources.
Entering into a power purchase agreement (PPA) can offer tangible benefits for businesses and organisations (commercial, non-commercial and public sector) looking to secure long-term, stable energy rates. One primary advantage is cost predictability. A PPAs can lock in electricity prices for 10-20 years, shielding you from volatile market fluctuations. Further PPAs can provide a hedge against rising energy costs and help reduce operational risks associated with fluctuation and the inevitable rise of energy prices. Entering into Purchase Power Agreements can contribute to meeting corporate sustainability goals by supporting renewable energy projects and reducing greenhouse gas emissions. The financial savings from a Purchase Power Agreement can enhance business competitiveness and profitability by lowering overall operating expenses.
YOU KNOW WHAT YOUR
ENERGY COSTS WILL BE
LONG TERM
HOW DOES A POWER PURCHASE
AGREEMENT WORK?
A Power Purchase Agreement (PPA) is a contractual agreement between a developer of a green power plant (us) – typically renewable energy such as solar or wind – and the purchaser of the electricity generated by the plant (you). The terms of a PPA outline details such as the price per kilowatt-hour (kWh) of electricity supplied to you over the lifetime of the agreement. The purchaser (you) benefits from stable pricing for your electricity needs and the developer (us) secures financing for the project.
One of the key benefits of a PPA for energy consumers is the stability it can provide in terms of cash flow. By locking in a fixed price for the electricity supplied via a PPA, users can better predict future cash flow therefore offering the ability to plan operations and investments in key productive equipment accordingly.​
Also engaging in a PPA means most upfront costs associated with solar or wind installation are simply are not a consideration for the energy user; these are the responsibility of the supplier. Consequently cash reserves are protected for more important investment and extensive borrowing to secure energy supplies is simply not necessary.​
Furthermore, PPAs can help energy users hedge against fluctuations in electricity prices and market conditions. By locking in a fixed price for electricity, users are protected from the risks associated with volatile energy markets. This can help consumers mitigate the financial risks associated with their projects and ensure a more stable and predictable cash flow over the long term.​
In conclusion, Power Purchase Agreements can be a valuable tool for organisations looking to optimise their cash flow and financial stability. By providing a guaranteed price per kWh bought-in, this mitigates energy price fluctuations. As the demand for clean energy continues to grow, the use of PPAs is likely to become even more common and essential in the renewable energy industry.
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Anglia Solar
20-22 Wenlock Road
London
N1 7GU
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