Finance your energy project with a Power Purchase Agreement (PPA)
Enjoy cheaper energy costs, long-term price stability, and on-site clean energy – all for no upfront cost – by entering into a Power Purchase Agreement with BHESCo
Most UK businesses recognise the financial benefits of solar and batteries, but upfront capital costs remains the biggest barrier to adoption.
A typical solar installation for a small to medium sized business can cost anywhere between £45,000–£150,000, with businesses having to prioritise between machinery, recruitment, fleet upgrades, and other operational imperatives.
The growth of Power Purchase Agreements (PPAs) and no upfront cost solar financing models exists specifically because lack of capital is such a common barrier. These arrangements allow businesses to install solar without any capital expenditure, with all upfront costs covered by the provider (BHESCo).
Your business then enjoys immediate savings on monthly energy bills, by accessing the cheap electricity provided by the systems we install.
What are the benefits of a Power Purchase Agreement?
Immediate savings on energy costs, as PPA price is guaranteed to be lower than your energy supplier
Secure long term electricity prices, as established in the PPA contract (~25 years)
Installation and quality assurance undertaken by BHESCo
All insurance costs covered by BHESCo
All cleaning and maintenance covered by BHESCo
Protection from volatile oil and gas markets
Entering into a Power Purchase Agreement - what makes BHESCo unique?
BHESCo is a social enterprise with primary missions:
- To drive down energy costs and power our economy with clean energy
- To drive down carbon emissions and reach net zero targets
We do this by installing energy saving and renewable energy technologies at no upfront cost to our customers.
The upfront capital expenditure (CapEx) of projects is met by our network of investors who want to use their money to address the climate crisis.
The upfront cost of project (plus 5% interest) is repaid to our investors over a number of years through the sale of renewable electricity/ renewable heat to the project customer.
Is a Power Purchase Agreement right for you?
We’re looking to partner with organisations who want to drive down long-term energy costs and carbon emissions with the help of our innovative financing.
If you’re interested in engaging BHESCo to design, install and potentially finance your energy project then please complete the short contact form and a member of our team will get back to you soon.
How it works - How our Power Purchase Agreement (PPA) can deliver long-term affordable, clean energy for your business
Project Development and design of Power Purchase Agreement
BHESCo’s Power Purchase Agreement can be utilised to finance solar, heat, and energy efficiency projects.
Here is an example of how it works for a solar power project…
1. We conduct an on-site survey
BHESCo conduct a site-survey and analyse our customer’s historic energy bill data to understand existing levels of energy consumption.
More on our survey >>> https://bhesco.co.ukcommercial/energy-survey-consultancy
2. We choose a qualified installer
BHESCo issues a tender to our network of local solar panel installers and selects the company that offers the best value for money.
3. We send a draft Power Purchase Agreement
Taking into consideration a range of factors, BHESCo draft a bespoke Power Purchase Agreement on behalf of the customer, offering to sell solar electricity produced by the solar array at an agreed price per kilowatt hour.
Some of the factors we need to consider when calculating the PPA price include:
- The anticipated electricity generation output from the solar array
- The sum of all installation costs
- The anticipated volume of electricity consumed on-site
- Project management costs
- System monitoring and reporting costs
- Maintenance costs
- Insurance costs
- Income from the sale of exported electricity
- Interest payments to people who have invested in the system (BHESCo shareholders)
- Anticipated monetary inflation
Project funding and installation
4. Power purchase contact agreed
Our customer agrees to the proposed electricity price and signs a Power Purchase Agreement.
5. Project funding
Upfront costs for the project are provided by BHESCo’s network of social impact investors (preferably from the area where the system will be based).
6. Energy saving / renewable energy technology installed
BHESCo project manages the installation of the solar panels and handles all associated considerations such as insurance, planning permission, grid connections, monitoring equipment, and the export of surplus electricity generation. In this was we ensure that the value created by our systems is optimised for the benefit of our customers
Maintenance and monitoring during the Power Purchase Agreement contract period
7. Customer pays monthly bill to BHESCo
The customer makes a payment to BHESCo each month via a Direct Debit. The monthly cost paid to BHESCo is typically lower than what would be paid to an energy supplier*.
* This will depend on the measures that the customer chooses for BHESCo to finance. We encourage customers to look holistically at their energy use, taking action to drive down consumption through energy efficiency improvements.
8. Monitoring and maintenance
The BHESCo team monitor the generation of the solar array to ensure that the technology is performing as expected and that the savings anticipated are being achieved. BHESCo addresses any issues as they arise. BHESCo arrange for solar panel cleaning and annual maintenance as is required.
The conclusion of the Power Purchase Agreement
9. Transfer of ownership
Once the upfront project costs have been repaid and associated interest payments made to the project investors, ownership of the solar panel array is transferred to the customer, who can enjoy free solar power for the remaining operational lifetime of the system.
Read more about all BHESCo’s financing options for commercial renewable energy projects: https://bhesco.co.uk/commercial/pay-as-you-save-finance
How our Power Purchase Agreement delivers long-term value
In most cases, the price per unit of electricity BHESCo offers the customer is significantly lower than what they currently pay to their energy supplier.
Further value is added to the contract due to the price certainty that is embedded into the Power Purchase Agreement. A typical agreement covers the expected life of the equipment, which in the case of a solar array is the warranty period of 25 years. As part of the PPA, BHESCo agree to fix price increases, with an annual increase of only at 3% each year for the duration of the contact. This is to account for the impact of inflation on operating costs.
By entering into a long-term Power Purchase Agreement with BHESCo, our customers are able to access long-term low-cost energy for a significant period of time. In addition to delivering meaningful cost savings to our customers, our Power Purchase Agreement provides price certainty and security from volatile energy markets, giving business leaders assurance over their energy costs for a quarter of a century, along with our expertise in renewable energy systems management.
We try to meet as much of the customer’s electricity demand through solar power generation as is possible, but this can almost never be 100%. Where demand cannot be met with solar power, the customer continues to buy electricity from their energy supplier, just as they do now.