Rising energy costs and pressure to reduce carbon emissions are driving companies to seek sustainable solutions. However, the initial investment in photovoltaic systems remains a significant obstacle. This is where the PPA—Power Purchase Agreement—comes in.
What is a PPA?
In a PPA model, LEFE designs and installs the photovoltaic system while a financial partner covers the investment. The company commits to purchasing the energy produced for 10 to 20 years at a contracted price, which is generally lower than the public grid rate. After the contract ends, the system becomes the company’s property at no additional cost.
What changes in practice?
Without a PPA: raising equity capital, managing the installation, assuming technical risks, and being responsible for maintenance.
With a PPA:
- Zero initial investment
- Operation and maintenance guaranteed by LEFE
- Energy at a stable price lower than the grid rate
- Immediate reduction in energy bills
- No capital tied up
- Greater financial predictability
When does it make sense to consider a PPA?
1. High consumption during the day
Higher consumption during daylight hours maximizes the use of the energy produced. Industrial companies with continuous operations are ideal candidates.
2. Available space
A roof with good sun exposure or available land is required for the installation of photovoltaic panels.
3. Operational stability
Financial partners value companies with stable consumption, operational continuity, and a long-term vision.
Case Study: Caparosa
Developed in partnership between LEFE and SparkWave Energy, this project delivered concrete results:
- Annual consumption: 742 MWh
- Installed capacity: 155.8 kWp
- Estimated annual production: 184.75 MWh
- Energy savings: 24%
- Initial investment: €0
The project delivered clean energy, a smaller carbon footprint, greater financial predictability, and energy independence—with zero investment from the company.
What to consider before moving forward?
Before signing a PPA contract, consider the following points:
- Agreed kWh price and its evolution over the term of the contract
- Annual price adjustment clauses
- Procedures in the event of a change of premises
- Liability for equipment malfunctions and replacements
- Contract termination conditions
A decision that warrants careful consideration
A PPA is not ideal for all companies. Some may achieve a higher return by investing directly. For others, especially those seeking to preserve capital and avoid managing energy assets, it may be the smartest solution available.
Talk to our team to assess whether a PPA makes sense for your company.
