Date posted: 31/03/2017 2 min read

Understanding solar power purchase agreements

With the price of electricity on the rise, businesses need to get proactive in managing their energy costs.

In brief

  • With rising energy costs, businesses are increasingly seeking alternative solutions to reduce energy bill shock.
  • Solar power purchase agreements (PPA) provide a way to reduce energy costs by accessing low-cost solar energy.
  • Under solar PPAs, businesses can gain price certainty from the electricity produced by solar for a number of years.

Brought to you by Origin Energy.

With rising energy costs, businesses are increasingly seeking alternative solutions to meet their energy demands and help reduce energy bill shock.  

One such solution is a solar power purchase agreement (PPA), which allows businesses to install solar photovoltaics (PV) on their premises without outlaying any capital investment.  

While solar PV systems have long been an option for Australian businesses looking to reduce their energy costs, the costs of installing a system large enough to meet their energy needs has been a sticking point for many.  

Solar PPAs provide businesses with a simple way to reduce their energy costs.

According to Ryan Willemsen-Bell, general manager, business energy and solar at Origin Energy, solar PPAs provide businesses with a simple way to reduce their energy costs by accessing low-cost solar energy.  

“This energy option is ideal for companies with unshaded roof space who plan to be in their premises for the long term and operate during the day.”  

Case study: Filterfab

Origin’s solar PPA package, Solar as a Service, allowed Stephen Rixon, financial controller at Filterfab, a company that develops products for the laundry and healthcare industries, to install a 10kW solar system on the roof of the company’s Brisbane premises without any capital investment in the system.  

Rixon locked in a low daytime solar electricity rate for the power the system generates, which could potentially save Filterfab up to an estimated A$41,000 on its electricity usage over the 15-year agreement.  

“We’re looking at turning on the solar system relatively soon and I’m excited to see what the savings will be,” says Rixon.  

Under Origin’s Solar as Service, businesses are able to maintain the same solar electricity rate for a number of years, protecting them against any possible future electricity price hikes, or they can choose a CPI indexed rate.  

Is a solar PPA for you?

No two businesses are the same and the amount that each business may save will vary depending on their daytime energy needs, roof space, the size of the system installed, the length of their agreement and general fluctuations in retail electricity rates.  

"The service is something that adds great benefit to not only a company's cash flow, but also to their green credentials too,” Willemsen-Bell says.  

“And, at the end of the day, it gives companies a solution for some of their biggest ongoing considerations.”  

Read more on solar PPAs from consumer advocacy group Choice and the NSW and Queensland state governments.  

Visit the Origin website for more information on Origin’s Solar as a Service product, or call Origin on 1300 134 138 to find out how it could work for you.