Page 34 - Energize May 2021

VIEWS AND OPINION

How PPAs change the way we think about solar

by Michael Zorich, SolarAfrica As PPAs become an increasingly popular
choice for commercial and industrial
ith South African businesses businesses in South Africa, property
feeling the worldwide pressure owners should ask the right questions
Wto reduce their carbon and understand the major differences
emissions and attain their sustainability when comparing solar proposals. One
goals, the demand for solar energy of the major concerns is that customers
continues to soar, especially with power aren’t educated enough when it comes
purchase agreements (PPAs) being a hot to understanding and comparing the
topic of discussion. finer details of solar energy contracts.
A solar PPA is a great alternative For instance, the term “No take, no pay”
to owning a solar system. It is the best means that you only pay for the energy
solution for businesses wanting to adopt you consume. Therefore, it is important
solar without having to pay any upfront that your solar system is sized based
Capex where the benefits of performance on how much energy your business
guarantees, insurance, maintenance and the consumes and not how much energy the David MacDonald
operation of the system are taken care of. system can produce.
A PPA is a simple agreement that is When a solar system has been sized
signed between the business owner and based on energy production, the number the end of the day, it’s not always about
the solar services provider; it includes the of “non-operational” business days such having the cheapest solar tariff but rather
installation of a solar system at no cost and as weekends and annual December who carries the consumption risk.
removes the challenges of having to insure, shut down periods are not taken into Whilst the typical length of a PPA is
maintain, monitor, operate and clean the consideration which means you don’t end around 20 years, business owners still
system for years to come. You pay for the up using all the energy the system has have the option to purchase the solar
energy you use, just as you would pay Eskom produced, resulting in lower savings and system from year five onwards, providing
or your local municipality; however, the solar money in your pocket. It is one thing to the choice of ownership at any time
tariff (kWh rate) billed is cheaper than the propose monthly savings but to be able to during the remaining 15-year period
national grid, providing a significant amount deliver those savings consistently based of the agreement. Many exit options
of energy savings each month and over the on-site consumption is where the “rubber are available should a business owner
lifetime of the agreement. hits the road”. We conduct a full technical wish to end the agreement sooner due
review and log data to determine each to the selling of the building. Flexible
Click here to listen to a recent interview property’s consumption ensuring our clauses including the option to cede
between Energize and David MacDonald, solar systems are accurately designed to the agreement to the new owner or to
SolarAfrica’s managing director. provide the highest customer savings. At transfer the solar system to the new
premises, form part of most PPAs. The
possibility of a fire or hail and lightning
storm is often overlooked until the solar
panels are broken and the system is out
of operation. Therefore, a PPA allows
business owners to have the peace of
mind that the solar system on their roof is
always monitored and insured accordingly
so that any damage caused to the solar
system is fully covered.
Capex-free solar has changed the
renewable energy landscape and the way
businesses are approaching their corporate
sustainability initiatives. With zero cost on
a company’s bottom line and the over-
arching goal of being a more sustainable
organisation, a PPA is a stress-free solution
that provides long-term savings, with the
biggest advantage being reduced electricity
costs from day one.

Contact SolarAfrica, Tel 012 881-4800,
info@solarafrica.com

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