Power Purchase Agreement (behind the meter) for business

‘Behind the meter’ is a type of a Power Purchase Agreement (PPA) where an energy provider installs renewable energy equipment on a business’ site. The business pays a pre-determined rate of electricity over time.

Renewable energy equipment is often solar PV systems.

Suitable for businesses that:

  • want to switch to renewable energy without owning or maintaining equipment
  • don't own the property and have a long-term tenancy of their site

Details

Project size: More than $7500

You do not own the equipment

The energy provider maintains the equipment

Contract length

  • 10–30-year contract
  • 3– 9-month agreement period

Off the balance sheet

Additional benefits

  • No upfront capital or security
  • Lower the cost of your energy bills
  • At the end of the agreement, you may get the option to buy the equipment
  • Available to property owners and lessees

Disadvantages

  • Contracts are more lengthy and complex than buying renewable energy equipment outright
  • As the electricity rate you pay is set at the start of the agreement, you may risk paying a higher rate than the market rate

How to apply: Currently, only a handful of solar PV installers and energy providers are offering this type of service. Contact your energy provider to see if they can facilitate this service.

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How it works

  1. Find an energy provider that offers behind the meter Power Purchase Agreements. Your current energy provider is a good place to start. You can find a local installer that might offer the service on the Clean Energy Councils list of accredited providers.
  2. The energy provider will buy, install, own and operate the renewable energy equipment on your site. They’ll sell the energy to you at a locked-in price. There may be times when you can’t use the renewable energy source and will instead use on-grid energy.
  3. At the end of the agreement, you may have the option to buy the equipment.

We advise you to always seek advice from your accountant and legal representative when entering into financial agreements.

Get a discount for your energy saving project

The Victorian Government offer businesses a discount on energy saving products that are installed by accredited Victorian Energy Upgrade providers. Check which energy saving products are registered for a discount.

Visit the Victorian Energy Saver for a list of simple tips to save energy in your business.

Corporate Power Purchase Agreements for larger businesses

Large businesses looking for a sustainable and renewable energy supply should consider a Corporate Power Purchase Agreement. This agreement gives businesses direct access to energy generated from large-scale solar and wind farms.

The Business Renewables Centre Australia is a not-for-profit initiative that streamlines and accelerates corporate purchasing of large-scale wind and solar energy and storage.

Want to know more? Get in touch with:

Sustainability Victoria's finance team who can help you through this process.

03 8626 8700

sustainablefinance@sustainability.vic.gov.au