Have you ever heard of Power Purchase Agreement (PPA) and microgeneration solutions?
You are lucky, because in this post we will explain everything that this involves, what they are, how they work, pros, cons and much more.
Join us and find out how your business can benefit from it.
What is a Microgeneration Solution & Power Purchase Agreement ?
Power purchase agreements are financial contracts between a buyer (usually a company or an individual) and an energy company (usually a utility), in which the buyer agrees to pay a price for electricity (either on production or delivery).
Microgeneration solutions are the production of electricity at the household or commercial level, using technologies such as wind, biomass, solar or hydrogen. These solutions can be part of a power purchase agreement, as the surplus energy produced can be sold to the utility.
These agreements also provides price regulation and guaranteed purchase prices and fixed storage purchase prices, allowing power producers to recover their costs in the long term.
How do PPA work with Microgeneration Solutions?
Power purchase agreements with microgeneration power solutions involve users producing their own electricity and then selling it to the national electricity system. Users may be able to access government grants or subsidies for the installation of microgeneration technology.
Once the installation is complete, the user will have to connect their energy source to the national grid, which will allow them to sell surplus energy to the national grid. The user will receive a price for the energy sold to the national grid. In addition, the user will also receive a bill from the electricity company for the amount of surplus energy sold. In the long run, the installation of microgeneration technology can be economical for the user.
What are the pros and cons of a PPA?
There are many benefits and challenges of the PPA, here are the most importants:
Microgeneration is an energy efficient solution, serving as a clean and reliable source of energy.
PPAs can be a great financial solution for energy producers to help finance the project and recover the initial cost.
Microgeneration can improve energy security by providing a local and reliable source of energy.
Large discounts in electricity costs can be seen when microgeneration is integrated with the commercial electricity market.
Greenhouse gas reduction cost savings can be realised by using emission-free microgeneration technologies.
The upfront costs of microgeneration can be prohibitive for many users.
Cloudy days in Ireland can reduce the benefits of producing energy from the sun.
The national grid infrastructure is evolving in Ireland, making it difficult to connect to the grid.
Current government regulations may restrict the deployment of microgeneration technology in Ireland.
Due to market fluctuation, commercial electricity prices may exceed the costs of energy produced by microgeneration.
Effectiveness of the use of microgeneration technology in Ireland
Microgeneration technology is energy efficient, with no unnecessary energy emissions. The use of microgeneration in Ireland could save money in the long run, as commercial electricity costs can be much higher. Electricity prices are not affected by fluctuating gas markets, which can be a great advantage for electricity consumers in Ireland.
What would be the costs associated with microgeneration technology?
The costs associated can be considerable. This could include an initial investment for the purchase and installation of electricity generation equipment such as solar panels, wind generators, biomass generators or energy storage devices. In addition, local permits may be required for the construction and maintenance of the microgeneration facility.
Potential savings associated with microgeneration electricity technology
The potential savings from this will always depend on the business. It is generally recommended for large energy users.
Although we can not measure in this post a generic cost for each business, we know that the benefits of a good implementation of PPA can be beneficial, since at the time of generating their own energy is no longer dependent on energy market prices.
If you would like to have a personalized estimate of the energy benefits of the PPA in your business you can contact us and ask for a quote.
Challenges facing microgeneration power technology (in Ireland)
The challenges facing microgeneration technology include fluctuating solar power, high upfront costs and a lack of infrastructure to connect local electricity generation to the national grid. In Ireland, mostly cloudy days mean that the benefits of generating electricity with solar panels are limited.
These difficulties can mean that users do not experience significant savings after the initial cost of the microgeneration installation has been paid for.
How Digren Energy can help your business?
At Digren Energy we offer energy solutions to help businesses improve their Power Purchase Agreement (PPA) contract.
Our team offers guidance to negotiate terms and ensure compliance, along with the selection of new cost-effective energy solutions. In addition, we offer financing to help businesses access the resources they need to improve their business prospects.
We also offer real-time energy price monitoring to provide a stable price with no surprises, helping to reduce business risk. Our energy solutions can not only help businesses increase their energy savings, but also help them meet sustainability goals.
If you are interested in having a non-binding quote you can contact us.