Commercial Solar PPA's

Interest is Fueled by SRECs

Solar PPA's (Power Purchase Agreements) are an attractive way for a host (landlord, owner-operator, farm owner) to "go solar" and save substantially on electricity costs without requiring any monetary investment (!).  You don't have to own the system to save.

Instead, the system is owned and operated by a PPA developer who's responsible for all costs and maintenance.  Electric cost reductions of 30% and more are possible, depending on your current rate and credit standing.  The only requirement is that the host has is to purchase all the power the system produces. Systems are therefore sized up to the historical usage, ensuring over production is not an issue.  (In fact, systems beyond requirements would not achieve NJ state approval). 

More on Solar PPA's

Solar PPA's represent the vast majority of the commercial solar installations in the state of New Jersey. Estimates exceed 5,000 operational solar PPA's to date.  Their cost savings and simplicity offers tremendous appeal.  The landlord need not raise any capital for purchase of equipment, nor be concerned with ownership and maintenance of the solar panel system.  Instead, he / she enjoys a fixed rate for power which is well below the utility rate.  The otherwise unused rooftop asset is productively utilized and the additional rooftop shading protects the roof.

The sole obligation of the host property owner is to buy the power produced at the agreed rate.  Contract terms are 15-20 years, locking future power costs.  Instead of being at the whims of a deregulated power industry, (averaging 6% annual increases), hosts knows future power costs will only increase at typically 3%.  Although current costs average $.16 cents without solar, the PPA rate can be between .09 - .13 cents depending on circumstances, current state incentive outlook and the aggressiveness of the developer. 

The PPA developer seeks profit only partially through the electric rate payments.  Additionally, the Solar Renewable Energy Credits, or SRECs, that the system produces help offset the system cost.  These Credits can be sold in the open market to power companies to defer the capital investment.  The system will also be depreciated, producing tax credits.  All-in-all, the PPA developer make an attractive return, accepting associated risks along the way, while hosts enjoy lowered power costs.

 

 

Rooftop owners need not be
concerned about the system itself.
The only requirement is to buy the
power produced.