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Solar PPAs: Four things your business needs to know

Solar PPAs: Four things your business needs to know

Clean energy, renewables, solar – these aren’t just buzzwords – they are saving companies money, creating jobs, boosting economic growth and helping to tackle climate change.

The challenge is finding a way to cash-in without taking any risk. How do you navigate this huge, growing market? How do you know who and what products to trust?

One of the easiest ways you can benefit from solar is through a Power Purchase Agreement (PPA).

Hang on, what is a PPA?

In simple terms it means getting a solar system installed at your premises with $0 up-front cost and buying the energy generated by the system for an agreed price which may be less than you would pay for grid energy. In short – Cheaper, cleaner power with no up-front capital cost.

 

Let’s simplify what you need to know about PPA’s.

 
1). SYSTEMS CAN BE OVERSIZED, REDUCING YOUR SAVINGS

Because you pay for all of the electricity that you generate in a PPA, you only need a system that generates enough to cover your usage. An oversized system means lower potential savings.

Mondo offers expert energy analysis that makes sure the system is optimised for your site. We analyse your energy use data then optimize solar systems accordingly, ensuring solar consumption and savings are maximized. An oversized solar system can result in excessive solar export which reduces savings.

Mondo can also conduct a site inspection to assess roofs and electrical switchboards. This ensures the solar system can be installed in a compliant and cost-effective manner.

 

Load variation example: Since you will pay for ALL of the energy you generate, you want a system that gives you the right balance between solar generated energy and your load. The graph above shows a snapshot of Summer for a recent PPA agreement with a school. Solar and load graphs demonstrate that a larger solar system meant that the school would be paying far more than necessary. 

 

Strike a balance: The system will generate enough energy to cover mid-week energy demand, whilst reducing unnecessary generation on weekends and holidays. 

 

2). ThINK long-term

In most cases, at the end of the PPA agreement term (usually between 10-20 years) you will own the system outright, but what happens along the way?

  • Ensure you are confident that your partner will be around for the long term. Mondo is one of Australia’s largest energy solutions providers with over $1bn in assets. We are trusted by businesses of all sizes, as well as by local, state and federal government, so you can trust that we’ll be here for the long-haul.
  • Your system may need to grow with your business. You’ll need a partner with your best interests in mind. Your energy needs may grow and technology will advance – who will be there to help you along the entire journey? At Mondo, we believe that energy efficiency is a long-term goal achieved through evolving, fit-for-purpose systems and smart energy management technology. We’re here to see that goal through and save businesses money in the meantime.

 

3). Think differently about the way you use energy

Utilise on-going energy management to gain efficiency. A great way to squeeze the most value out of a system is to include a smart energy management and monitoring device, like Ubi. An Ubi, included with all Mondo PPA systems, will give your business near real-time access to your energy data, transparency across multiple sites, and remote access to control circuits.

Our team will also keep an eye on things at your site to assist in achieving positive results.

 

4). cashflow CONSIDERATIONS

Why should you get a PPA and not a lease, or purchase a system outright? PPAs in most instances provide day 1 savings without outlaying any up-front capital. Outright purchases and leases rely on the business owner to maintain the system. If you commence a PPA and for some reason, you change your mind and want to own the system, you can usually simply purchase the system for a reasonable price.

 

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