What is a self-consumption PPA? Solar plant with no initial investment
Before we ask ourselves what a self-consumption PPA is, let’s start with another question. What is a PPA? It stands for Power Purchase Agreement (PPA) and is a long-term clean energy purchase and sale agreement between a renewable developer and a consumer. Normally it is industries that consume large amounts of electricity that are the main interested parties. The energy supplier guarantees two things to these industries: a fixed monthly price and 100% renewable energy.
What is a self-consumption PPA?
Now, what is a self-consumption PPA? As mentioned above, it consists of an agreement for the purchase and sale of clean energy, but in this case, specifically of energy of solar origin and therefore from a photovoltaic self-consumption installation. Although we will talk about this later, the popularity of this contract lies in obtaining clean energy with no initial investment.
And what is this PPA contract like? As it is long-term, it has a duration of between 10 and 25 years. So the longer the term, the greater the savings. In addition, a fixed monthly price is agreed upon, which makes the customer more independent of the constant changes and, currently, the soaring price of energy on the market.
Which type of PPA contract is the best?
There are two different types of PPA contracts depending on the point of injection of the energy. That is, depending on where the photovoltaic installation that generates the energy is located with respect to the company or industry in question. It should be said that neither is better than the other, but rather one is more optimal than the other depending on the conditions of the company. But it is true that with the on-site PPA a greater saving is achieved because the self-consumed energy is not subject to the distribution network and its respective charges.
As you can imagine, this is the modality that interests us at Enertika. It is renewable energy produced on the customer’s facilities (rooftop or adjacent land) or nearby. In this way, as the solar plant is located on the same perimeter as the consumer, it is connected directly to its internal network. In this case, the energy supplier is responsible for the preliminary study, the assembly, the installation of the plant in the industrial building and its maintenance. This is a comprehensive service that can also include energy management. In conclusion, by avoiding the demand to the network, the most competitive price is achieved.
In this case the photovoltaic installation is far from the company or industry, so the energy passes through the transmission or distribution network of the electrical system and reaches the point of consumption. In other words, it is not owned by the customer. In addition, the PPA contract can also be associated with another production plant, such as a wind farm.
Attention: advantages of on-site self-consumption PPA
Now we will talk specifically about the benefits of on-site self-consumption PPAs, as Enertika is a specialist in this type of contract and we still have a lot to tell you.
The savings produced are higher
Compared to the traditional off-site PPA contract, the on-site PPA guarantees greater savings, since it does not depend on the network tolls to which the company is tied with the other modality. In addition, this way there are no losses along the way, which involves the country’s network itself.
Zero initial inversion
Why is it so important that PPA contracts do not require an initial investment by the customer? In general, companies that bet on renewable energy require a large amount of energy, and therefore a considerable installation size, and therefore a higher investment. So thanks to the fact that the renewable energy supplier takes care of the initial investment, industries can take the step without taking risks and start benefiting from the contract for both parties.
100% renewable energy and guaranteed savings
The renewable origin of energy has several advantages. It guarantees savings of up to 30% on the company’s electricity bill. In addition, the company itself can benefit from, on the one hand, the branding that renewables currently represent for the brand image. On the other hand, it can take advantage of the Next Generation program and the new EU regulations that benefit companies that join the energy transition and penalize those that do not. In other words, to continue competing in the market.
End of contract: from savings to investment
At the end of the contract, the customer can purchase the PV self-consumption system and it becomes the property of the company. In this way the savings will increase considerably. The benefits can also be increased by extending the contract if the company prefers and the supplier company agrees.
Clean energy with no initial investment starting now
Having said all this, at Enertika we are specialists in PV self-consumption PPAs and you can contact our team to test the waters if you are interested in a contract like this. So remember, zero initial investment, zero worries, zero risk and guaranteed savings.