The power purchasing agreement – the next evolution in Solar Power Financing
Amidst frequent disruptions to production caused by load-shedding, relentlessly rising electricity prices, a sunny climate and low confidence in the potential recovery of the national power fleet, the country’s commercial and industrial sector has embraced the opportunity to self-correct through solar energy. Solar energy is swiftly being embraced across the agricultural, commercial, industrial, manufacturing and hospitality industries, as businesses pursue the independence that self-generation provides.
Solar plants generally have a lifespan of 20 – 25 years, producing power for long after their development and installation costs have been amortized. However, some businesses are not in the position to outlay the capital required to pursue this form of energy. This has given rise to new and innovative solar power financing models, including the power purchasing agreement.
New Southern Energy now offers the power purchasing agreement (PPA) model to qualifying sites, subject to an evaluation process and feasibility study achieving certain requirements. This blog post provides a short overview of the benefits of this approach to solar power financing.
Power purchasing agreement – Enabling access to solar power
The sheer growth of the solar industry and broad adoption across so many different sectors is validation that solar energy makes financial sense. However, there are certain organisations that seek the benefits of solar without being positioned to invest the capital that is required to develop and build a solar plant.
This has given rise to New Southern Energy making available the Power Purchasing Agreement model in which the development of the solar plant is financed / owned / operated and managed by a third party. The solar power financing approach enables companies to provide the space to build a plant (on a roof or land) and commit to purchasing the resulting power output, while the plant itself belongs to the counter-party.
In this way, your organisation can access higher volumes of solar power without outlaying the capital investment.
Solar plant asset managers are also incentivized to ensure the highest possible efficiency is reached by the plant so that it produces maximum power for consumption. In future, various versions of this solar power financing model are anticipated to enter the market, enhancing the availability of solar power to trade and industry even further.
Power purchasing agreement – Providing access to technology solutions
A multitude of technology-oriented solutions are currently being developed to help solar plant operators manage their plants more effectively. Data management software, combined with artificial intelligence allow for improved solar plant portfolio monitoring, reporting, early warning alarms and fault finding. These help to avoid potential under-performance caused by weather conditions, hail damage, panel theft, or technical faults.
The power purchasing agreement model means that your solar plant will have increased access to these technology solutions, as our asset management team stay abreast of market trends and developments. Therefore, your business will be spared the operational challenges that accompany ageing solar plants with the best solutions deployed to ensure optimal efficiency, and maximum power production at all times.
Power purchasing agreement – Ease of operations and maintenance
Some organisations are not placed to incorporate the operational requirements of maintaining solar their plants and ensuring that they function at optimal levels. Some simply don’t have the expertise in-house, while for others, the burden is too onerous.
The power purchasing agreement model takes the operations and maintenance burden off your hands as this function rests with the New Southern Energy as the asset owner. Not only will you have access to the skills and expertise of our specialized operations and maintenance division, you’ll also be free to continue focusing on your own core business.
This approach therefore enables businesses to enjoy the benefits of solar energy without taking on these additional requirements.
Solar revolution will continue
The past decade has shown an upward growth curve in solar installations with more businesses adopting solar energy every year. Solar provides not only cleaner energy, but also reduced carbon emissions, lowers your carbon footprint, and helps your company to reach its sustainability goals. Additionally, many import markets place great value on clean energy being used in the production line.
Solar power financing will help to expedite the country’s journey to increased consumption of renewable energy. The solar revolution is certainly poised to continue. Isn’t it time that you considered solar?
To read more about New Southern Energy’s funding solutions, click here.