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Energy savings and resource efficiency

Business

Case study - power purchase agreement

The Dudley Hotel in Bathurst wanted to reduce their energy costs. They entered into a power purchase agreement (PPA) with Smart Commercial Solar to install a 25 kW solar system on the hotel roof. Under the PPA the Dudley Hotel buys the energy produced by the system for less than the cost of grid electricity.

 

Product             Power purchase agreement (PPA)                                
Customer Dudley Hotel (Bathurst, NSW)
Project 25kW rooftop solar system
Upfront cost $0
Repayments

There are no repayments.

Dudley Hotel buys the energy generated by the solar system at a cost lower than grid electricity for seven years. 

Benefits 

Net savings of $400 a month on energy bills after repayments.

At the end of the PPA Dudley Hotel expects to save $15,000 per year.

Retailer

Smart Commercial Solar

Financier Smart Commercial Solar


Robert 'Stumpy' Taylor has owned the Dudley Hotel in Bathurst for 21 years. Over that time the hotel has tripled in size. Energy costs are among his biggest expenses so he decided to do something about it.

He was aware of solar energy, but was initially sceptical about the industry’s claims. Cost and performance of the system were also a concern as was the need to pay significant money upfront. Mr Taylor was also worried about how the system would affect the hotel aesthetically.

Smart Commercial Solar offered him a `pay as you go, PPA over 5 to 10 years. Under the agreement Smart Commercial Solar own and guarantee the performance of the system and Mr Taylor pays only for the energy the Hotel uses, at a tariff lower than grid electricity. To address Mr Taylor’s concerns Smart Commercial Solar flew him to other installations to show how the panels would look on the Dudley Hotel and designed a low profile 25 kW array to meet 20-30 per cent of the hotel’s energy needs.

The Dudley Hotel signed a seven year PPA, after which it will then enjoy free electricity for the life of the system (expected to be 25 years). Mr Taylor said:

“I’m saving $400 a month now, but I wouldn’t care if it was only $100 because there have been no upfront costs, and after seven years the whole lot will be mine with no penny outlay.”

After seven years Mr Taylor expects to save around $15,000 a year in energy bills. He’s so happy with the project that he now spends his time encouraging fellow publicans to explore solar using a pay as you go PPA.

Page last updated: 27 January 2016