Hello and welcome back to my blog. Today, we’re diving deep into power purchase agreements (PPAs) in the solar industry, a hot topic among many solar companies currently pushing for a greener future. This vital financing tool has emerged as a saving grace for commercial and industrial (C&I) solar adopters who wish to avoid upfront costs and reap immediate energy savings.
Getting into a solar PPA is a simple concept—install solar panels for your home or business without an initial investment, and enjoy lower rates for clean electricity from day one. However, it’s important to know the ins and outs of these agreements as they can influence your journey towards solar energy adoption.
Now let’s delve into the criteria for a bankable PPA. Based on expert discussions from solar financing gurus, Mark Palmer and Nick Perugini, the two most crucial criteria for a sound PPA are 1) The ability for the customer to save money compared to grid power, and 2) The customer’s creditworthiness and long-term outlook. It’s beneficial for developers to pair up with financing partners who hold similar project profiles, ensuring both parties understand their investment’s ins and outs.
However, the size of your solar array for home isn’t excluded from consideration. PPA project sizes vary—a financier may typically begin with projects of around 150-200 kW. Smaller projects can also be successful if they’re grouped in multi-site portfolios. In contrast, on the more significant end of the C&I range, virtually any project is viable, with projects across the U.S ranging from 20 kW to 20+ MW.
One key point brought home by Palmer and Perugini is engaging reputable financing partners early in the venture. When solar developers and EPCs source indicative PPA pricing early on, it provides a gauge of customer interest and establishes solid deal perimeters, such as project diligence and financing requirements. Proper planning prevents surprises or confusion further in the process.
Moreover, for those fresh to the PPA scene— listen to your customers. Their priorities can give valuable insights into financial preferences, guiding your marketing strategy and understanding.
2023 went into the record books as an exceptional year for C&I solar, with a massive 1.8 GW installation—a 19% growth from the preceding year. Predictions continue to be favorable with an average annual growth of 12% forecasted through 2028. Ensuring you’re equipped with practical PPA know-how is vital as this expansion continues.
To achieve this, there are platforms like Conductor Solar where developers can source PPA financing and benchmarking, streamlining the path to completed projects. Hence, with the right approach, PPAs provide a compelling way to deploy more clean energy while offering tangible economic and environmental benefits for all stakeholders involved.
It goes without saying that PV or photovoltaic technology is no longer a playground for the elite; instead, it has become a viable option for any house owner or business wishing to make sound financial decisions while also embracing a more sustainable energy source. There’s a lot to consider when making the switch to solar, but with thorough research and understanding, the benefits surely outweigh the challenges.
Stay tuned to my blog for more updates and discussions in our wonderful solar-filled world. Until the next time we talk, keep shining brightly!
Original Articlehttps://pv-magazine-usa.com/2024/04/05/the-expanding-commercial-solar-ppa-landscape/
