BOOT MODEL FOR SOLAR ROOFTOP
| Initial Investment in your solar project | By Solar Investor |
|---|---|
| Downpayment | 0 - 10% project cost |
| Monthly payments | To solar investor for solar electricity consumed |
| When do you own the plant? (From when you get completely free electricity?) | After end of PPA/ lease term (15 - 25 years) |
| Primary savings through | Lower tariff compared to current tariff during PPA/ lease period and free solar power after that |
| E4S facilitation | Finding lowest solar electricity tariff for you |
| E4S quality assurance | Ensuring lowest solar electricity price and favorable terms & conditions |
Frequently Asked Questions
- Solar PPA, solar OPEX, Solar BOOT – all three refer to a single concept of buying solar power under a long term agreement from another company that owns a solar project. This company is known as solar generator.
- A solar generator invests in a solar project and supplies power to energy consumers such as factories, office and other commercial buildings, colleges and other educational institutes, hospitals, etc. The power is supplied under a long term agreement to the energy consumer. This agreement is known as Power Purchase Agreement (PPA).
- Energy consumer is required to pay a pre-agreed tariff for the actual number of units supplied/ consumed.
Month No. of units supplied Per unit tariff Total monthly payment by customer Fixed lease Jan 100 6 600 600 Feb 80 6 480 600 Mar 110 6 660 600 - In such an arrangement under a solar PPA, solar OPEX or solar BOOT model all risk of non-performance of the project is to the account of solar power generator and the consumer pays as per actual generation and consumption.
- In a solar lease, a fixed monthly lease has to be paid to the solar generator irrespective to the generation in the respective month.
- Solar lease is more prevalent in US. Whereas Solar PPA, Solar Lease, Solar BOOT models (all three mean similar things) is more prevalent in Indian market.
- A solar generator can build a project of any capacity depending on your power requirement and there is no capacity restriction. However, different solar generators have different focus areas. Some solar generators prefer to build projects > 100 KW capacity, while other prefer > 1000 KW (1 mw) and still others prefer less than 50 KW capacity.
- Broadly there are 2 different type of solar projects under solar PPA/ BOOT model –
- Solar projects under Open Access (OA) mechanism – These projects are constructed at locations other than the consumer premises. Solar energy is supplied to the consumer using electricity grid of electricity distribution company. In such a case, some charges need to be paid to the electricity distribution company (DISCOM). These charges vary from state to state and can vary from 20 paise per unit to Rs. 1.5 per unit. These charges also vary depending on the type of consumer (industrial / commercial) and the connection voltage level (11/22/33/132 KV).
- Rooftop solar projects / Off grid solar projects – Solar projects can also be built on idle roof of industrial and commercial buildings or on vacant land within premises of a company. Solar energy generated from these projects can be directly supplied to the host company at a operative voltage level of 415/440 V. In such cases no charges are payable to electricity distribution company.
- Investment in solar project on roof or within premises of another company presents higher risk to the investor in case of a default. Accordingly, there are very few investors willing to offer PPA or BOOT model from rooftop or off grid solar projects.
- Investors will have interest in investing in rooftop solar project in your building premises if you satisfy following :
- Shadow free area – You have a shadow free roof area greater than 5000 sq. ft. There are no obstructions on your roof or neighboring buildings that can cause shadow on the area where you want to install solar. Obstructions on north of the space are ok. Objects on south, east and west side of the roof space can cause shadow. In such a case, while estimating suitable rooftop area, you should remove area under shadow.
- Sufficient electrical load – You should have sufficient electrical load considering that each 100 KWp solar project generated 400 to 500 kwh per day. For investors to show interest and supply solar power, ideally you should have a average daily consumption of atleast 300 units per day.
- Strong roof – The roof of your building should be able to withstand a load of approx. 15 kgs per sq. mtr. This is usually not a problem for RCC roofs. For factory shed, as a thumb rule if a person is able to walk on the roof for maintenance, it is likely that the roof shall be able to support the solar project.
- Suitable roof type – Roofs made of RCC, GI sheet are suitable for rooftop solar projects. Roofs made of asbestos are not suitable.
- If you have an asbestos roof and your power cost is higher than Rs. 7 per kwh, some of the investors might be willing to invest in replacement of asbestos roof at their cost.
- Orientation of roof – In case of a factory shed: North – South sloping shed – South sloping side of the shed can be used to implement solar project. East-west sloping shed – Both slopes of the roof can be used to implement solar project. RCC roof – Mostly usable.
- Credit rating – Solar Investors prefer to work with energy consumers that have an investment grade credit rating of BBB+ or better on their long term debt. However, if you have a credit rating better than C/D, you still stand a chance. We are happy to support your decision to Go solar.
- You can register your project on www.exchange4solar.com. We shall contact you for all details and prepare a project brief for solar investors. This brief shall be shared with multiple investors registered with us.
- Each investor shall provide a quote for your project. We shall share the 2 lowest tariff’s received with you for further discussions and finalisation with the investors.
- Our objective is to help you get the lowest tariff and favorable terms and conditions. If you can reach out to various investors on your own while also exploring proposals from investors registered with us, feel free to do so. At the end, you can compare these proposals and finalise with the investor that offers lowest tariff and favorable terms and conditions under solar PPA/ solar BOOT model.
- The usual term of solar PPA / solar lease agreement is 10 to 25 years. Higher the term, lower is the tariff. Project is transferred to the consumer/ roof owner free of cost at the end of PPA term of 10-25 years.
- In exceptional cases, terms of 10 – 14 years is also possible. This comes with various riders and is suitable for companies that expect to have continued operations even after 15 years but do not want to commit for PPA term of 10 year of higher.