The main financial benefits of Storage Power Purchase Agreements (PPAs) for businesses include:
- Cost Savings: Storage PPAs allow businesses to benefit from energy arbitrage and peak shaving, which can reduce overall energy costs. Energy arbitrage involves buying electricity at low prices and selling it at higher prices, while peak shaving reduces demand during peak periods to avoid high demand charges.
- Risk Management: By providing fixed or predictable pricing for storage services, businesses can manage energy price volatility more effectively. This helps in budgeting and reduces the financial risks associated with fluctuating energy costs.
- Capital Expenditure Avoidance: Entering into a storage PPA means businesses do not have to invest upfront in purchasing and maintaining their own storage systems, which can be expensive. This allows them to conserve capital for other business needs.
- Predictable Energy Costs and Savings: Similar to traditional PPAs, storage PPAs can offer a stable financial framework for businesses, allowing them to predict their energy expenses over a long period. This stability is crucial for businesses planning their energy budgets and can lead to significant savings over time as utility rates typically increase.
- Potential for Revenue Generation: In some scenarios, businesses can generate revenue through energy storage by selling excess energy back to the grid or providing ancillary services like frequency regulation.
These financial benefits make storage PPAs an attractive option for businesses seeking to optimize their energy management while controlling costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-main-financial-benefits-of-storage-ppas-for-businesses/
