Australia’s Clean Energy Finance Corporation (CEFC) has announced it will provide up to $20 million to accelerate the uptake of commercial solar power systems.
The senior debt finance will be provided to ET Solar Australia to go towards a Power Purchase Agreement (PPA) program.
A solar PPA is a long term contract to purchase electricity generated by a solar power system installed at a company’s facilities.
“There is huge scope to expand and deepen the solar PV market in the commercial sector,” said CEFC CEO Oliver Yates.
“We see the PPA finance model as a way to remove the barrier of the upfront capital requirement which should enable many more Australian businesses to benefit from solar, reducing energy costs and lowering emissions.”
The CEFC backed program, already underway with a shopping center solar carport pilot project in Queensland, will see the installation of systems ranging between 30KW and 2MW. The program has an emphasis on major energy users; including shopping centers, mining and manufacturing businesses.
PPA’s provide long-term peace of mind on the price companies pay for the solar component of the power they use – and that electricity is significantly cheaper than the cost of mains grid supplied power. If grid electricity prices increase, overall savings will increase.
The PPA model overcomes the barrier of significant payback periods, enabling customers to achieve immediate savings on their energy bills.
The program isn’t the first time the CEFC has backed a solar leasing type initiative.
Last year, the CEFC announced it will provide finance of up to $70 million for SunEdison programs offering long-term leasing and power purchase agreements for commercial and residential solar installations.
The CEFC says the PPA model has proven highly successful elsewhere and more than 75 per cent of new home solar power systems in California are installed under lease financing.
By the end of June last year, the Clean Energy Finance Corporation had contracted investments of over $900 million in projects with a total value of over $3 billion. Its 40 direct investments and 25 projects co-financed under aggregation programs are expected to achieve a positive net benefit Australian taxpayers.
Editor’s note: Energy Matters is a SunEdison company.
