We know that while many businesses want to invest in renewable energy, committing a large amount of capital to a solar PV installation isn’t always practical. Cash flow is essential for growth, whether you’re investing in new equipment, expanding your operations or maintaining financial flexibility. That’s where a power purchase agreement (PPA) can make all the difference when considering solar on your site.
A power purchase agreement allows your business to enjoy the benefits of commercial solar without paying for the system itself. We fund, design, install and maintain the solar PV system, while you simply purchase the electricity it generates at an agreed price that is lower than buying it from the grid. It’s one of the simplest and most cost-effective ways for businesses to take control of their energy costs while not having to pay for the installation.
Why choose a Power Purchase Agreement now?
Businesses continue to face rising operating costs, with energy remaining one of the largest and most unpredictable expenses. At the same time, organisations are under increasing pressure to reduce their carbon emissions and demonstrate their commitment to sustainability, whether that be by customers or by supply chain partners.
A power purchase agreement allows you to address both challenges without making a large capital investment. Instead of waiting until you have the budget to purchase solar outright, you can begin reducing your energy bills immediately while keeping your capital available for business growth.
How does a Power Purchase Agreement work?
When you enter into a power purchase agreement with us, we, or a trusted third party, become your renewable energy partner. We assess your site, whether that’s your rooftop, unused ground space or a commercial car park, and design a solar PV system that suits your business and energy usage. Once everything has been agreed, we take care of the entire project. We fund the installation, manage the construction and continue to own and maintain the system throughout the agreement. There are no development costs, installation costs or maintenance costs for your business.
The electricity generated by the solar PV system is prioritised for use within your premises, helping to reduce the amount of electricity you need to purchase from your existing supplier. Because solar energy is one of the most affordable forms of electricity available in the UK, we can offer that power at a significantly lower rate than traditional grid electricity – typical savings being 40% from when the installation is energised.
Our power purchase agreements typically run for between 15 and 30 years, giving your business long-term certainty over a large proportion of its electricity costs and enabling it to not only use the capital costs towards other business priorities but also forecast lower operational costs as a result.
Why do businesses choose a Power Purchase Agreement?
One of the biggest reasons businesses choose a power purchase agreement is because it removes the biggest barrier to investing in solar: the upfront cost. Purchasing a commercial solar PV system outright can require a significant capital investment. While the long-term returns are excellent and there are many benefits of capex projects, many businesses would prefer to keep that capital available to grow the business, invest in staff, purchase equipment, or improve operations.
With a power purchase agreement, you don’t have to choose between investing in renewable energy and protecting your cash flow. You can do both. Rather than tying up valuable funds in energy infrastructure, you can continue investing in the areas of your business that generate growth while still reducing your operating costs and improving your sustainability credentials.
Lower energy bills from day one
One of the immediate benefits of a power purchase agreement is lower electricity costs. The electricity generated by your solar PV system is sold to you at a lower rate than your current electricity supplier, helping you reduce your overall energy spend from the moment the system begins generating power.
Depending on your energy usage and the size of the installation, businesses can often achieve energy savings of up to 40%. As electricity prices continue to fluctuate, generating your own renewable energy also reduces your reliance on the grid, providing greater protection against rising energy costs.
Greater certainty over future energy costs
Predicting future energy prices has become increasingly difficult in recent years, making budgeting a challenge for many businesses. Our power purchase agreements are designed to provide greater certainty. We offer a fixed annual inflation rate of just 3%, allowing you to understand how your electricity costs will change throughout the agreement. Instead of being exposed to unpredictable market prices, you have confidence in your long-term energy costs, making financial planning much easier.
Power Purchase Agreement vs buying solar outright
One of the questions we’re asked most often is whether it’s better to purchase a commercial solar PV system outright or choose a power purchase agreement.
If you buy a solar PV system, you’ll own the asset and receive all of the electricity savings it generates and also be eligible for tax savings and government grants, where available – more on that here. However, you’ll also need to fund the installation and maintenance of the system throughout its lifespan.
A power purchase agreement offers a different approach.
We fund, install, own and maintain the solar PV system, while you simply purchase the electricity it generates at an agreed price. This allows you to benefit from renewable energy without tying up valuable capital or taking on the responsibility of managing the system. Once again, for businesses focused on preserving cash flow and investing in future growth, a power purchase agreement often provides the greatest financial flexibility.
No maintenance or operational responsibility
Owning renewable energy infrastructure also means maintaining it, but with a power purchase agreement, that’s entirely our responsibility. We monitor, maintain and service the solar PV system throughout the lifetime of the agreement, ensuring it continues performing as expected without creating additional work or costs for your business. If any maintenance is required, we take care of it, no matter if it’s needed in the first year or the 17th year.
Supporting your sustainability goals
Reducing carbon emissions has become an important priority for businesses of every size. A power purchase agreement gives you the opportunity to generate clean, renewable electricity on-site without the costs that may have put you off up until this point in time. Not only does this help reduce your environmental impact, but it also demonstrates your commitment to sustainability to customers, investors and supply chain partners who increasingly expect businesses to take action towards reducing their carbon footprint. You can market your sustainability steps too, which will help increase awareness of your business being environmentally conscious.
Who is eligible for a Power Purchase Agreement?
Power purchase agreements are suitable for many different types of businesses, particularly those with consistent daytime electricity usage and suitable space for a solar PV installation. We’ve helped organisations across manufacturing, warehousing, logistics, retail, education, offices and industrial sectors unlock the benefits of renewable energy through fully funded solar installations.
Your business could be an ideal candidate if you:
- Own or lease commercial premises with suitable roof space.
- Have unused land or a car park suitable for solar panels.
- Use a significant amount of electricity during the day.
- Want to reduce energy costs.
- Have ambitious sustainability or net zero objectives.
- Want greater certainty over future electricity costs.
Cromwell Tools has shared their experience with a Power Purchase Agreement installation in this video.
What happens if you move premises?
Business needs change, and we understand that. If you decide to relocate during your agreement, our power purchase agreements are fully transferable to incoming landlords or occupiers.
Frequently asked questions about Power Purchase Agreements
Do I need to pay anything upfront?
No. We cover the full cost of designing, installing and maintaining your solar PV system, so there’s no capital investment required from your business.
Who owns the solar panels?
We retain ownership of the system throughout the agreement and remain responsible for its maintenance, monitoring and performance.
How much could my business save?
Every business is different, but many organisations reduce their electricity costs by up to 40%. We’ll provide a tailored assessment based on your energy consumption and site before any commitments so you can forecast the savings and see if this is the right option for you.
What happens if the system needs maintenance?
You don’t need to do anything. We monitor and maintain the system throughout the agreement, ensuring it continues performing efficiently. Our in-house maintenance team proactively monitors the system remotely so any faults or maintenance needs can be addressed swiftly and efficiently.
What happens at the end of the agreement?
At the end of the agreement, we’ll discuss the options available. This could include extending the agreement, purchasing the system or arranging for its removal, depending on what’s right for your business.
What makes Harvest Green Development trusted partners?
We believe transitioning to renewable energy shouldn’t be complicated or financially out of reach. That’s why we provide a complete end-to-end service. We design, develop, fund, install and maintain every solar PV system ourselves, allowing you to benefit from renewable energy without the risks and costs associated with ownership.
Our goal is to help businesses reduce operating costs, improve energy security and move towards a more sustainable future while protecting valuable capital. We will manage the entire project so there is no stress on your team. We’ve worked with some of the largest businesses across the UK with sites often entering a second and third stage of solar because of how impressed they have been by the workmanship and savings provided.
Is a Power Purchase Agreement right for your business?
If your business has suitable roof space, unused land or a car park and you’re looking to reduce energy costs without making a large capital investment, a power purchase agreement could be exactly what you’re looking for.
By removing the upfront cost of solar, we make renewable energy accessible to businesses that want to lower their electricity bills while keeping their capital available for future growth. Whether your priority is reducing operational costs, achieving sustainability targets or protecting your business from rising energy prices, we’re here to help you find the right solution.
If you’d like to find out whether your site is suitable for a fully funded solar PV installation, get in touch with our team today. We’ll assess your property, explain how a power purchase agreement could work for your business and help you take the first step towards lower energy costs without any upfront investment.
