Power Purchase Agreements

Power Purchase Agreements

Aurora has the capacity to install, own and operate solar PV facilities and sell their solar energy to corporate clients. The conditions of power purchase are detailed in a Power Purchase Agreement (PPA) or solar lease which is negotiated directly with you to ensure the agreement is workable for both parties.  The cost of solar is lower than the cost of electricity provided by the national grid for many clients.

In the case of South Africa, with the costs of solar equipment falling and electricity tariffs escalating, it is expected that a large-scale solar facility will provide power at costs lower than Eskom’s lowest bulk tariff from 2019 onwards; making solar a viable option to investigate for all energy-intensive clients.

Cost Comparison: Solar PV vs Grid Electricity

With price reductions of over 70% since 2011, solar is proving more and more favourable compared with grid-tied tariffs. Included here is an instructive example taken from South Africa: a comparison of the solar equivalent* of Eskom’s lowest bulk industrial tariff and the indicative price of solar clearly shows the significant long term cost savings of solar.

Megaflex Tariff and Forecast Solar PV Costs/KWh

Megaflex Tariff and Forecast Solar PV Costs/KWh

*Solar equivalent tariff: For every unit of electricity produced by an embedded solar PV system, a unit purchase from Eskom is replaced or ‘not purchased’. The ‘not purchased’ units vary in value based on time of day, week and year. The total value of the replaced electricity is calculated at the hourly Eskom tariff for a year equivalent to the output of the PV system. This provides a unit value (‘equivalent tariff’) for the output of your system.