Outright Purchase (ORP):
TRRC will, following client consultation and analysis of existing electricity and hot water solutions and current billing, propose a system for purchase by the Client. TRRC also offer an operational performance monitoring and maintenance contract including extended warranties on system components to provide peace of mind and hassle free benefit of the systems purchased.
Application:
For clients that wish to own the system outright from day 1 and enjoy its benefits over the long term.
Business Case a Client Decision Criteria:
TRRC will present a client facing technical solution, explaining simply what the system will do for the client and what the business case is behind the proposed system in terms of its financial benefit to the client. TRRC may also assist the client in raising their own funding in order to acquire the systems proposed. TRRC add further value by presenting and directing clients to consider the tax and cash flow implications of the system being considered, which assists clients in making a well informed decision.
Benefit Summary:
Solutions offered deliver a long-term benefit that overtime, delivers massive savings on the cost of electricity produced by the system. ORP’s are suitable for clients with a longer term investment and benefit horizon ranging from as little as 4 to as long as 25 years.
Rent to Own (RtO):
Underpinned and aligned to the savings of the underlying projected system performance benefit to the client.
Application:
Client wishes to rent the system and ultimately own it, and effectively pays for it over a period of time, as a preference to outright purchase of the system.
Deal Structure Business case and Term Deals available:
Different deal profiles can be offered, but there would typically be a minimum escalating rental/lease payment period agreed, with an option to acquire the system at nominal value at the end of the term, or settle with a balloon/settlement amount as an option during, or at the end of the rental term, in order to outright purchase the system at points in time. In all cases the initial rental/lease term contract duration and terms must be sufficient to ensure the system is fully paid off and then transferred in ownership to the client. Typical rental term 5 to 10 years, thereafter the client owns the system.
Lease/Rental Basis & Benefits:
The rental charged is derived from the projected utilised energy that the system will generate with an escalating tariff structure over the term of the rental agreement. As far as possible TRRC try to provide the client with a near cash flow neutral situation from day one, whereby the expense they would have incurred from the power company for the energy now generated and consumed from the PV System, is similar to that used to rent the system, but with the benefit that over the term of the rental agreement the Client will end up owning the system. Thereafter the client enjoys a long term net savings on energy costs with a low level of ongoing maintenance costs – effectively enjoying a massive energy cost saving for 10 to 15 years or more once the initial deal term is concluded.
A. PPA Deals:
Power Purchase Agreement:
Client will purchase the electricity generated and actually metered as used by the Client against an agreed tariff structure over a minimum period of time – 10 years or more typically. The system however remains in the ownership of TRRC. At the end of the term TRRC will offer the client the option to purchase the system outright or extend the PPA agreement, but with no obligation to do so.
Application:
The client wishes to benefit from renewable systems but wants to pay for the electricity as it is generated and consumed. The client does not want to own the system. This is typically a long term contract over 15 to 25 years with the client paying less for the electricity generated than they would pay from either Eskom or the local municipality power provider from the outset of the agreement term.
Deal Structure:
The amount paid is linked directly to that which the system produces and is consumed (metered) by the Client. The system is designed to and sized based on the client energy profile with the requirement that all power produced by the system is purchased by the client. The client will need to underwrite a minimum utilisation of the power generated by the system.
Basis of PPA and Benefits:
The client usage profile must be sustainable, allowing for a part or majority of the client energy to be provided via the PPA agreement at a reduced cost compared to the prevailing cost of electricity from either Eskom or the local municipality. Alternative funded solution variants: Straight Lease Solutions.
B. Fixed Term Lease:
Straight Forward Lease:
Client leases the system and derives the benefit of the system for a set period of time. The lease charges are not specifically linked to the actual power generation profile or consumed, but rather meeting a specific power need.
Application:
Typically this applies where client wants or needs the benefit of the system but has a lumpy or irregular usage profile and prefers a fixed cost agreement for having the benefit of the system. The system suits clients who either have limited or irregular/unreliable or very expensive electricity, but irregular or inconsistent usage profiles, but want the benefit of the system.
Deal Structure:
A lease agreement is implemented with a fixed monthly charge escalating over the term of the lease annually linked to the system size and inherent cost of installation and term funding. This provides the client with certainty of the cost of electricity that can be generated by the system over the term of the lease. Typical lease term 12 to 25 years
Basis of lease:
The lease fee is due independent of how much of the actual energy produced by the system is consumed or not, so long as the system is producing the expectant design energy production profile it was designed to achieve.
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