The dynamic residential PV market segment is seeing a new push to introduce solar leases, framed as power purchasing agreements (PPA). The program will allow the installation of residential solar PV system with no upfront cost at all under an attractive 10-year contract.
Previously, PPA or solar lease contracts run for around 20 years – long past the payback period for a residential rooftop system either purchased outright through savings or a bank loan. This latest push to introduce leases to the Australian marketplace has cut this in half and is targeting new housing developments in an attempt to gain traction.
The project partners are the Yolk Property Group, Infinite Energy, the Department of Communities and Ventura Home Group. The first a pilot project will be implemented at the Amble Estate in Girrawheen, in the Perth suburbs.
Home owners who participate are provided with a rooftoop solar PV system, and if they so wish, a battery storage and EV-charging system. Residents then pay around 40% less for daytime solar energy than what they pay to WA utility Synergy. Consumption that exceeds the rooftop production is charged at the regular tariff.
According to the project partners, the model allows savings of up to S$600 per year. With a set duration of ten years of the PPA home owner save $6000 on their energy bills and become owners of the PV system after the PPA ends. This allows them to use the solar energy free of any tariffs for the remainder of the lifespan of the equipment, which could well be another ten years.
“This pilot paves the way for solar PPAs to become the norm for millions of homes across the country, delivering cheaper and cleaner electricity, including to those that do not have the surplus cash to purchase a solar system.”, said Managing Director of Infinite Energy Aidan Jenkins in a statement.
Perth-based Infinite Energy will provide the solar systems and installation.
At present, the PPA is available only at the newly-built Amble Estate in Girrawheen, but the project initiators highlight that information gathered from this pilot, can be used to upscale and spread this type of PPA both in WA and beyond.
“This could be an absolute game changer – if all developments in Australia rolled it out, the reduction of carbon emissions would be immense. It would help Australia become a world-leader in the up-take of renewable energy,” Director of Yolk Property Group Tao Bourton said.
Solar leases have proven to be a very successful model in the U.S. solar marketplace, with companies like SolarCity (now Tesla Solar), Sunrun and Vivint Solar all having built large portfolios of solar homes under 20-year leases. The development of PV PPAs in the U.S. has been powered in part by access to affordable capital, by virtue of the 30% solar Investment Tax Credit.