How solar power purchase agreements work
A solar power purchase agreement allows you to install a solar power system without having to pay upfront. The availability of purchase agreements in certain areas is dependent on the offerings of authorised providers.
An authorised provider installs, owns, operates and maintains the solar system at your home. In return, you agree to pay for the electricity produced (usually kilowatt hours) by the system.
If the solar power system is generating energy when you need electricity, the power is directed to your house and you'll save money on electricity you'd otherwise buy from the grid. If your house doesn't need electricity, then the solar power is sold to the electricity grid.
You should make sure that the size of the solar system is matched to closely meet your daytime usage of electricity as electricity may be sold back to the grid at a lower rate than what you paid for it in the purchase agreement.
A connection to the electricity grid through your electricity provider is still necessary. This ensures your home will receive enough electricity to meet your needs when the solar power system is not generating power (such as overnight). The price per kilowatt hour for solar is generally less than the price for electricity from the grid.
Because you receive your electricity from 2 different sources you will receive 2 electricity bills: 1 for the solar power (from the purchase agreement provider) and 1 for the electricity you use from the grid.
Terms and conditions for solar power purchase agreements
The purchase agreement will set out the terms and conditions agreed to by you and the provider. These may include:
- the initial tariff and how it increases during the contract
- meter reading and inspection
- site access
- invoicing and payment
- re-selling excess electricity into the grid
- length of the agreement
- early termination fees
- whether it can be transferred to another premises or person
- ownership of the system at the end of the agreement.
You should read the contract carefully when considering an agreement, and seek independent financial and legal advice if necessary.
Ergon Energy customers
If you decide to switch your electricity account to a private electricity retailer, you now have the option to revert back to having Ergon Energy as your electricity retailer.
If something goes wrong
Find out your rights and who to call for help if something goes wrong with your solar power.