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Can’t Afford PVs? Try a PPA
July 10, 2008 - Contact FacilitiesNet Editorial Staff »
Today’s tip is about solar power purchasing agreements, or PPAs If you’re interested in joining the growing number of facility executives using photovoltaic panels to generate clean, carbonfree energy, but don’t have the capital to invest, consider a solar PPA.
Here’s how it works: A non-utility company will install a PV array on your roof. They’ll own the PVs, but you enter into a contract with them whereby you’re locked in to a specific energy rate on the power generated by the PVs for a fixed number of years, usually 15 to 25. Companies that do these PPAs tout the arrangement as a great way to insulate yourself from the volatility of the energy market. And, especially in states with aggressive renewable portfolio standards – like California, which must generate 20 percent of its energy from renewable sources by 2010 – the cost of the power is equal or less than the cost of power at the utility.
Another financial benefit, which is a benefit of solar power in general, is that PVs are at their peak efficiency when energy is the most expensive – during peak demand periods, usually the afternoons of hot summer months. That means PV panels can help shave some of that peak load and make your energy bill from the utility a little less expensive.