As Australia accelerates its transition to renewable energy, businesses and organisations are exploring innovative ways to secure cost-effective and sustainable power sources. One such solution gaining traction is the Power Purchase Agreement (PPA).
What is a Power Purchase Agreement (PPA)?
PPAs offer a strategic approach to procuring renewable energy, providing financial predictability and supporting environmental goals. Under this agreement, PPA Provider owns and maintains a complete renewable energy system on the business’s premises, including solar panels, battery storage, inverters, and other necessary equipment.
This no-capital-investment model enables businesses to access clean energy without incurring upfront costs or ongoing operational and maintenance expenses. Instead of purchasing the system, the business pays only for the electricity it consumes at a fixed, stable, and competitive rate, typically lower than standard retailer prices.
Types of PPAs
On-Site (Behind-the-Meter) PPA
- The system is installed directly on the business’s premises.
- The business consumes the generated electricity and may export excess energy to the grid.
- Ideal for businesses looking to reduce reliance on traditional power providers.
Off-Site (Virtual) PPA
- The energy is generated at a remote solar farm or battery storage facility.
- The business purchases energy virtually through a long-term contract.
- Suitable for companies with multiple locations or high energy demand.
How Does a PPA Work?
- System Design and Installation
Redx conducts an energy assessment and designs a renewable energy system tailored to the business’s needs. The system includes solar panels, battery storage, inverters, and an energy management system to optimise efficiency.
- No Capital Investment Required
The business does not need to pay upfront for the system. Redx fully funds the installation, covering all equipment, labour, permits, and grid connection costs.
- Business Pays Only for Energy Used
Instead of purchasing the system, the business buys electricity at a fixed, lower rate through a long-term contract (typically 10–25 years). The PPA rate is stable and predictable, shielding businesses from grid price fluctuations.
- Continuous Operation & Maintenance by Redx
Redx remains responsible for the system’s operation, maintenance, monitoring, and performance throughout the contract period, ensuring maximum efficiency and reliability. The business bears no repair or servicing costs.
- Grid Integration and Backup Power
If battery storage is included in the PPA, the system stores excess solar power for use during peak demand periods or outages. The business remains connected to the grid for additional supply when needed.
- End of Contract Options
At the end of the PPA term, businesses typically have three options:
✅Extend the contract under new terms.
✅Purchase the system at a reduced price
✅Remove the system if the business chooses to discontinue.
Benefits of PPA
- Zero Upfront Cost: No capital investment is required; the provider covers installation and maintenance.
- Lower Electricity Costs: Lock in a fixed rate often lower than grid prices.
- Energy Price Stability: Protection from electricity market fluctuations.
- Sustainability Goals: Reduce carbon footprint and improve corporate social responsibility (CSR).
- No Maintenance Hassle: The provider manages system maintenance and performance monitoring.
- Potential Ownership: Option to purchase the system at the end of the contract for further savings.
Redx: Easy Steps you should do
📌 Step 1: Consultation & Energy Assessment
We analyse your business’s energy usage and determine the best renewable energy solution.
📌 Step 2: Agreement & System Installation
A PPA contract is signed, and the system is installed at no upfront cost.
📌 Step 3: Power Generation
Your business starts using the generated electricity at a fixed, lower rate than grid prices.
📌 Step 4: Long-Term Energy Optimization
The provider handles system maintenance, ensuring continuous efficiency and savings.
📌 Step 5: End of Agreement Options
At the end of the contract, businesses can choose to extend the PPA, purchase the system outright, or have it removed.
🚀 Take control of your business energy costs today! Contact us to explore your PPA options.