If we take a grid market cost of €0.10/kWh as a reference, the same amount of energy would have an annual cost of:
1,500,000 kWh × €0.10/kWh = €150,000
The savings (grid price minus PPA price) would amount to €75,000 per year.
Over a 20-year contract, assuming these conditions remain exactly the same, the accumulated savings would reach €1.5 million.
This is, however, an illustrative example. In a real project, several factors must be taken into account, including electricity price trends, module degradation, operation and maintenance costs, the hourly consumption profile, guarantees and contractual conditions.
What is happening in the PPA market?
The PPA market is evolving as renewable energy penetration continues to increase.
In Spain, high photovoltaic generation during the middle hours of the day is creating periods of very low or even negative electricity prices. This situation, known as solar price cannibalisation, is changing the way projects are structured.
According to data compiled by LevelTen Energy, Spain remains one of the European markets where solar PPAs offer competitive prices, but it is also one of the markets most exposed to this phenomenon.
At the same time, hybrid PPAs combining renewable energy with BESS energy storage systems are gaining importance.
Batteries make it possible to store energy when solar generation is high and use or sell it at other times, increasing the value of the energy generated.
This reinforces one key idea: it is no longer only about producing renewable energy, but about deciding how, when and at what price it is consumed.
What should be analysed before signing a PPA?
A contract that may last 10, 15 or 20 years requires rigorous analysis.
Among other aspects, companies need to assess their consumption profile, expected generation, the PPA price, its adjustment formula, contract duration, guarantees, maintenance responsibilities, exit conditions and the possibility of incorporating energy storage systems.
An attractive price per kWh alone is not enough. The real value of a PPA depends on how well it fits the energy needs and circumstances of each company.
At Solventa6, we see PPAs as one tool within a broader energy strategy.
We analyse the company’s actual energy consumption, available surface area, expected generation and different economic scenarios to determine which model can deliver the greatest value.
From there, we assess whether the best option is direct investment in self-consumption, an on-site PPA, an off-site PPA, the integration of BESS batteries or a combination of different solutions.
The objective is to turn energy into a tool for competitiveness, predictability and control over the company’s energy costs.
