A Power Purchase Agreement (PPA) is an increasingly popular method for businesses to take advantage of solar PV systems without any up-front cost.
Solar PV systems allow businesses to use space on their premises or building to generate renewable solar electricity on-site, reduce energy costs and cut their carbon footprint.
But these agreements are not the reserve of businesses who lack the capital to install PV systems themselves. Amazon, McDonalds, Google and Ford are amongst the household brands who utilise PPAs.
As a result of the gas price crisis, global security concerns and subsequent leaps in energy costs, renewable generation return on investment (ROI) and payback periods have been drastically improved.
How would a Power Purchase Agreement work for my business?
A funder invests in the purchase, installation and maintenance of a solar PV system on your business’ premises.
As part of the negotiation process, your business will negotiate and agree a power purchase unit rate (p/kWh) with the funder for an agreed period. This may be for part or all of your building’s annual consumption. These rates are significantly cheaper than the market rate for purchasing electricity; allowing you to save considerable sums.
The capacity of the system may allow it to generate more energy than you need, which means the funder can then export back to the grid for financial benefit. This usually depends on the amount of space you have available.
Often, the system won’t cover all of your building’s annual consumption and you will have a “top-up” amount of energy procurement to arrange to cover the shortfall. This will be in-line with market rates.
The funder gets overall returns spread over a period of years and the business benefits from a reduced carbon footprint and cost savings.
How to use our PPA savings calculator
Step 1: Grab a current energy bill to see full details on your current usage
Step 2: Input your annual usage (AQ/AC), day unit rate, night unit rate and standing charge information.
If you only have a day rate on your contract, input the day rate in both day and night rate boxes below, then input the night usage as “0”.
Step 3: Input the square footage of your proposed system site. That could be your roof, a car park, a disused piece of land or a field.
Step 4: Take a look at the savings on offer and speak to us for further information if you would like to investigate further. Procure Smart’s quoting process is free and no-obligation.
Our Power Purchase Agreement savings calculator
PPA Savings Calculator
Current external supply cost
|Annual day usage (kWh)|
|Day unit rate (p/unit)|
|Annual night usage (kWh)|
|Night unit rate (p/unit)|
|Current standing charge (p/day)|
|Estimated current cost annually||£0.00|
PV system output and costs
|Roof space (metres squared)|
|Estimated output (kWh)||0|
|System unit rate (p/unit)|
|Consumption from PV System Cost||0|
|Top up supply cost||0|
|Night usage cost||0|
|Total estimated cost with system||£0.00|
|Potential annual savings||£0.00|
|Potential full contract savings||£0.00|
Estimates based on 240kWh per metre squared and 80% roof space coverage.
Our calculator is intended to be used as a rough estimation tool and is not a final price. However, it should provide a strong guide to determine PPA suitability.
Your final Power Purchase Agreement (PPA) costings will vary depending on annual usage, current contract agreements and the negotiated unit rate with your funding partner. Speak to our experts if you’d like a full, free, no-obligation quote for a PPA or for other solar PV purchasing methods, such as asset funding or capital outlay.
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