Benefits of Solar PPAs for Commercial Customers



For many business owners, installing a solar powered energy solution is a very attractive idea, but a challenging feat due to the cost of initial setups. These initial costs are a large barrier, blocking the ability of countless commercial customers to turn towards sustainable energy solutions. This is where Solar Power Purchase Agreements come to the rescue! A Power Purchase Agreement (PPA) is a financial arrangement in which a third-party developer owns, operates, and maintains the system and a host customer agrees to site the system on its property and purchase the system’s electricity output for a predetermined period of time. When involved in a PPA, the commercial customer, or the host, is able to obtain solar electricity without an upfront capital cost! 

In addition to no upfront capital costs, the host customer benefits from long-term predictable energy pricing, no system operation or performance risks, a positive cash flow project from the very beginning, demonstrable environmental commitment, potential carbon footprint reduction, and potential increase in property value. A good example of a commercial customer involved in PPAs is the well-known Wal-Mart. As of October 2013, Wal-Mart has 215 solar energy systems installed on properties across the globe. In California specifically, Wal-Mart’s solar portfolio has expanded to more than 75% of its stores in the state by installing solar power systems on more than 130 store rooftops. This effort has reduced Wal-Mart’s energy expenses by more than one million dollars, reducing its environmental footprint and allowing those savings to be passed on to benefit its customers, employees, and shareholders. Solar PPAs let everyone win!

 

-Jade Hamilton, Business Development