In Partnership with Phuket Solar
“IS IT REALLY POSSIBLE TO HAVE PRIVATE PPA FOR INSTALLING SOLAR
PANELS IN FACTORIES WITHOUT INVESTING ON YOUR OWN? HOW DO YOU GET REWARDED?”
“The solar cell system is one of the main needs for factories that use energy throughout the day, as electricity costs increase every year. Solar cell systems help reduce electricity bills by providing free electricity during the day, and importantly, they also help reduce global warming. Currently, there is an increasing investment in solar panel installation, and the government is offering more opportunities for investors, such as the private PPA model for installing solar panels in factories or energy purchase agreements from solar power. This allows factories to own the plan and install solar systems without having to invest themselves.”
WHAT IS A PRIVATE PPA FOR CONSTRUCTING SOLAR POWER PLANTS? IS IT POSSIBLE TO DO? WHAT ARE THE RETURNS?
Private PPA stands for Private Power Purchase Agreement, which refers to the buying and selling of solar energy from a ‘solar cell system’ between a company providing solar installation services and a factory that wants to install the solar cell system.
The company providing solar cell installation services will maintain the solar system throughout the contract period. The project contract typically lasts around 15 years, during which the company must pay monthly electricity bills, such as a percentage discount on the electricity bill to the company providing the solar system installation service.
This allows the factory to reduce electricity costs more effectively than using electricity from the regular grid or power network.
Once the contract expires, the company will receive ownership rights of the solar project and can reduce electricity costs by 100% by generating energy from the solar cell system.
WHICH TYPES OF BUSINESSES IS IT SUITABLE FOR?
The company will receive a fixed electricity discount rate of 15% to 30%. The company will profit from generating electricity from the solar cell system. Simply put, after the 15-year contract ends, it can be seen that during the first 15 years, the returns are relatively low and remain the same each year. However, once the 15-year contract expires, the factory will gain ownership rights of the solar project, resulting in a significant increase in the power produced by the solar cell system.
Typically, solar energy systems have an average lifespan of 25 years, meaning that after this 15-year contract, the company will be able to reduce electricity production costs from solar energy for an additional 10 years.
It is suitable for companies/hotels that use a lot of electricity during the day, such as companies/hotels that operate 6-7 days a week.
It is suitable for companies/hotels that want to use solar energy to save energy and protect the environment in the long term but do not want to invest themselves due to concerns about the risk of not obtaining ownership rights of the solar system after the solar power purchase agreement expires.”
It is suitable for companies/factories that want someone else to take responsibility for managing the solar cell system.
Summary of the benefits of a private PPA for installing solar panels in factories:
- You do not need to use your own money for
- You can reduce electricity costs by approximately 35%.
- The company installing the solar system will take care of the solar system for you.
- After the contract period ends, the company will own the solar system, which can be used until the system’s lifespan expires.”
