Everybody (smart) knows to reduce, THEN produce. Meaning use energy efficiency measures before you add solar. So why are PPA companies not adopting adding LED lighting and other energy efficiency measures into long-term agreements? Customers love the “no upfront cost” and “no cost maintenance” aspects of PPA companies, so why aren’t we adding to other measures that are more cost effective?
Third-Party PPA Providers
As and EPC and third party PPA provider we’ve revised a PPA to include LED lighting reduction. The client pays for reduction and production. Being in the market for small projects, I’ve heard of other companies that say they finance multiple technologies in one simple contract but yet to see it. So I went ahead and created our own, and what do you know, it pencils very nicely. Much more than solar alone. Using baselines and time of use calculations to standardize the payments for the LED products is the easy part. It’s like a lease schedule within a service agreement. We all know how PPA companies work, so marrying the two is like high school sweethearts!
Most PPA companies calculate their returns either pre or post tax Internal Rates of Return (IRR’s), and if you want to increase your IRRs a couple of points, take a look at a solar and LED PPA. If you hate money, keep doing what you’re doing.
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