Commercial Solar PPA In India
For large and small companies, commercial solar PPA is an easy way to make solar affordable with zero capital investment and no burden of system ownership.
In one of our older posts, we briefly explained what is solar PPA, its benefits in general and how the solar PPA (Power Purchase agreement) arrangement works for solar power. We introduced solar PPA as an agreement between a solar project developer and a solar electricity purchaser (end user or consumer), where the system is installed at the end users premises by a third party, who then charges the user on monthly basis.
It is a solar financing option which is generally suitable for industrial and commercial solar power user. In this article, we want to highlight some more aspects of solar PPA for this category of users i.e. for businesses.
There are various other models (similar in nature) that are used in the industry viz.
- Solar leasing
- Build-Own-Operate-Transfer (BOOT)
- Renewable Energy service company (RESCO)
Many of these terms are sometimes used interchangeably. Here we will look at a typical solar PPA option for businesses in India.
Types of businesses which can benefit from commercial solar PPA
Large commercial, industrial and institutional businesses in India are placing PPAs at the centre of their energy strategy. PPAs create an energy delivery agreement between such commercial users and renewable energy project developers that allow the organization to lock in energy prices for up to 20 years.
So when we say that large organizations can benefit for power purchase agreement, what does it mean?
- In terms of power consumption, consumer with energy consumption of at least 3 lakh units per year, or roughly paying more than Rs. 2 lakh per month is an ideal candidate for commercial solar PPA.
- From space perspective, higher sq feet area doesn’t always imply high electricity consumption. But roughly, businesses with around 20,000 sq feet of usable roof space should consult with solar EPC companies like Insolergy offering solar PPA.
- If the nature of business is such where electricity is one of the key raw materials, like for factories , process industry, shopping malls, warehousing and cold chains, commercial solar PPA can be a lucrative option as saving on electricity bill immediately improves their bottom line.
We suggest commercial complexes, industries, shopping malls and even large townships must evaluate availing the option of solar PPA to meet their sustainability goals.
Benefits of Commercial Solar PPA
Reduction in power bills with virtually zero upfront investment
With commercial solar PPA, the user can expect to save around 25% – 40% on their electricity bills, as soon as the solar power plant is installed. Also, with virtually zero upfront investment, the user can expect positive cash flow from day one.
Faster way of achieving sustainability goals
There are a number of different routes that can be taken to reach corporate renewable energy goals. Commercial solar PPA is one of the most popular solutions many organizations pursue.
Hedge against rising price of electricity
We’ve been witnessing a constant rise in electricity prices in India.PPA let companies capture the best energy price in the market and committing to low prices decreases financial risk from rising electricity prices in the future.
About Insolergy Technologies
Insolergy is a comprehensive EPC solar solutions provider in India. The company provides Turnkey Solar Solutions, Project Management Consultancy, Engineering Consultancy, Operations & Management and Solar finance facilitation for solar power plants in India. The company has offices in Pune and Mumbai.
Insolergy client portfolio for project management consulting includes both State Operated and Private Infrastructure Developers in field of Transport and Hydro Power, large Trusts, etc.