Under a traditional SPPA, the yearly increase in the solar electricity price is typically pre-determined at the outset of the deal, and usually ranges from 2 to 4 percent annually. That structure provides traditional solar project financiers and their lenders and investors with a very predictable cash flow stream for the entire 15-25 year life of the SPPA deal. It also provides price certainty to solar customers. However, having a solar electricity price with a pre-set annual increase that bears no direct connection to utility rates makes some prospective solar customers uncomfortable. Many solar customers ask, “What if utility rates do not rise by 4 to 6 percent per year as projected? What happens if my utility rate actually goes down?”
Under a traditional SPPA, utility rate inflation risk falls on the customer. While the probability is unlikely, there is a risk under a traditional SPPA that a customer could end up under water where the price it is paying for solar electricity actually exceeds the price it pays for power from the utility, that is until now.
RSBF’s Utility Rate-Indexed PPA sets the cost of electricity at 5% below your current utility rate and keeps it at 5% less no matter whether your utility raises or decreases their rates. Add this to the features of our normal SPPAs – no investment, no maintenance, no risk, only buy the power produced by the system – and your organization has a no risk PPA guaranteed to save your organization money over the long term.
Tax exempt leasing is another option nonprofits can consider. Click here to learn more.