Institute
The PPA Model
The Centrality of Access to Capital
Solar capital costs are falling rapidly and are aligning with traditional energy. In 2009, solar material costs alone declined an astonishing 50% from 2008 price levels. Still, the upfront cost of photovoltaic technology remains higher than fossil fuel-powered plants and many potential commercial clients face challenges in financing solar power systems.
The Solar Financing Revolution
A solar Power Purchase Agreement (PPA) from D-SUN offers financial certainty and substantial savings over the uncertainties and price inflation anticipated from electric utility providers.
Under a PPA, D-SUN develops, finances, constructs, and operates the PV array on the client’s property. The client pays D-SUN for the energy the panels produce at a rate below local utility rates. Typically, a PPA covers a 15-25 year contract period.
In 2008, over 70% of non-residential installations utilized the PPA model. The PPA commercial market is growing rapidly and expected to reach $8 billion in 2013.
The Unique Advantage of Solar
Solar photovoltaic systems offer power generation at uniquely low operation, monitoring, and maintenance costs. Typical warrantied life is 20-25 years and estimated useful life is 40 years.
For a mid-sized commercial office building, savings over the lifetime of a solar system are often in the hundreds of thousands or even millions of dollars. The solar PPA uniquely satisfies both the social and political demands for alternative energy sources and the market demands for lower energy costs.
