Power Purchase Agreements (PPAs)

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What are Power Purchase Agreements?

A Power Purchase Agreement (PPA) is a financial arrangement where a third-party developer installs, owns, and operates an energy system on a customer's property. The customer then purchases the system's electric output for a predetermined period.

PPAs provide schools with a way to receive stable and often lower-cost electricity with no upfront capital investment. The developer handles the upfront costs of sizing, procuring and installing the solar panels. The developer also takes responsibility for the operation and maintenance of the system for the duration of the agreement.

Benefits of PPAs for Schools

  • No upfront capital cost: The school does not need to invest in the installation
  • Reduced energy costs: Typically offers electricity at a lower rate than the local utility
  • No maintenance responsibilities: The developer handles all maintenance and repairs
  • Predictable energy prices: Protection against rising energy costs
  • Path to ownership: Many PPAs include an option to purchase the system after a certain period

How PPAs Work for Educational Institutions

Under a PPA, the school agrees to host the solar energy system and purchase all the electricity it generates for a fixed period, typically 15-25 years. The price paid is often lower than the retail rate from local utilities, resulting in immediate cost savings.

The developer earns income from selling electricity to the school, as well as from any tax credits and incentives generated by the system. At the end of the PPA contract term, the school may have the option to extend the agreement, purchase the system at fair market value, or have the system removed.

Is a PPA Right for Your School?

PPAs are particularly advantageous for schools that:

  • Want to reduce energy costs without upfront investment
  • Lack internal expertise to maintain a solar system
  • Cannot utilize tax incentives (as non-profit or public entities)
  • Want to reduce carbon footprint with minimal financial risk

PPA Process for Schools

1

Site Assessment

Evaluation of your school's energy usage, roof or ground space, and solar potential.

2

PPA Proposal

We provide a detailed proposal outlining system size, expected energy production, and PPA rate structure.

3

Agreement & Approvals

Once the proposal is accepted, formal contracts are drafted and necessary approvals from governors/trustees are secured.

4

Installation

The system is installed, typically during school holidays to minimize disruption.

5

Operation

The school begins purchasing solar electricity at the agreed rate, while the provider maintains the system.

Interested in a PPA?

Our team can help determine if a Power Purchase Agreement is the right solution for your school.

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Case Studies

Example Primary School

St. Mary's Primary School

Implemented a PPA to install a 30kW system with zero upfront cost, saving £3,000 annually.

Read More
Example Secondary School

Westfield Academy

PPA-funded 75kW system providing 25% of the school's electricity at a 15% discount to grid rates.

Read More

Frequently Asked Questions About PPAs

Most PPA contracts for schools run for 15-25 years. This period allows the provider to recoup their investment while offering the school stable, discounted electricity rates. Longer terms typically offer better rates but represent a longer commitment.

At the end of the PPA term, schools typically have three options: (1) extend the PPA for a further period, often at a reduced rate, (2) purchase the system at fair market value, or (3) have the provider remove the system and restore the site to its original condition.

Under a PPA, the provider is typically responsible for all system maintenance, monitoring, and repairs. This is a significant advantage for schools, as it removes the need for specialized knowledge or maintenance budgets. The provider is incentivized to keep the system performing optimally to maximize the electricity sold.

Schools typically need approval from their governing body or board of trustees. For state schools, additional approvals may be required from the local authority or Department for Education. The process may also require legal review of the contract terms. Our team can guide schools through this approval process.

PPA rates are typically set below the current retail electricity rate to provide immediate savings. Rates are determined based on system installation costs, expected energy production, maintenance costs, and the provider's required return on investment. Rates may be fixed for the entire term or include a pre-defined escalator (typically 1-3% annually).

Ready to Explore PPA Options for Your School?

Our team can help you understand if a Power Purchase Agreement is right for your institution and guide you through the entire process.

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