Power Purchase Agreement (PPA)
Use of solar panels on building facilities (rooftop, covered parking, or ground mounted) can reduce utility costs and reliance on nonrenewable energy sources by capturing and converting sunlight into energy that is used to offset energy use. Primary financing mechanisms for solar energy systems are capital purchases by the site owner. However, high capital purchase costs, ongoing maintenance costs and manpower requirements, lack of fiscal incentives, and mistrust in the existing local solar vendor base has meant that adoption in Pakistan remains dismally low.
A Power Purchase Agreement (PPA) is a long-term contract to buy clean electricity at a predetermined rate. As the PPA provider, Shams Power absorbs all the capital costs of design, construction, operation, and maintenance. The customer realizes a lower utility bill immediately, as they purchase the clean solar electricity produced at a predetermined below-the-baseline energy rate. The Shams Power solution works in synchronization with the local utility grid supply AND/OR the backup power generator supply. Client Name will be able to substitute a portion of its traditional monthly electricity bills and diesel cost, with the bill for the solar energy used, leading to significant total energy cost reductions.
Shams Power will finance, design and install, and undertake ongoing operations & maintenance of the solar PV installation at the Client Name site, with the aim to provide green energy. Shams Power and the Client Name will enter into a long term 20 year Power Purchase Agreement, whereby Shams Power would fund the cost of installation and maintenance of the system, and the Client Name purchases the energy generated by the system from Shams Power for the duration of the contract, at a lower cost than it would have to pay in the baseline scenario.
Shams Power provides all services in an integrated package of PPA Financing, Turnkey Engineering, Procurement, and Construction (EPC), and Operations and Maintenance – resulting in a superior customer experience.