Understanding the Solar Outright Purchase Model
What is the Outright Purchase model?
In the OUTRIGHT PURCHASE model, the entire investment comes from the power consumer. Customer generally would hire a solar EPCC company who provide turnkey installation of entire solar power system and hand over assets to consumers. EPC will carry out annual operation and maintenance (O&M) of solar PV system on mutually agreed cost per annum.
The OUTRIGHT PURCHASE model is also known as the EPCC Model (Engineering, Procurement, Construction and Commissioning).
During the Engineering phase, engineering experts will conduct site surveys to determine the appropriate power generation capacity for your premise depending on your area and electricity consumption pattern, select the appropriate equipment and complete the engineering design.
During the Procurement phase, your preferred solar company will source for the best-in-class quality equipment to fulfil your power needs. At buySolar, we pre-screen solar suppliers for certifications, experience, and quality before they join our online marketplace. So, be rest assured that the procurement of components is done by reliable and approved suppliers.
During the Construction phase, engineers will construct and install the solar solution on the premise.
During the Commissioning phase, tests are performed to ensure the solar PV system is ready to be plugged to the grid to transfer energy and handed over the customer.
Solar PV systems are generally implemented under the NEM and SELCO programmes.
NEM allows consumers to generate electricity from solar PV systems for self-consumption, and export excess electricity to the power grid which is converted to credits and will be reflected in the following month’s electricity bill.
SELCO enables individual, commercial and industrial power consumers to hedge against rising cost of electricity through installation of solar PV systems to generate electricity for their own usage. Any excess electricity generated under SELCO is not allowed to be exported to the power grid.
Who should adopt Outright Purchase model?
Any business with a business premise that has ample space for the installation of a solar PV system and can afford the upfront investment in owning a solar PV system should opt for the solar OUTRIGHT PURCHASE model.
Furthermore, an OUTRIGHT PURCHASE investment has a windfall potential in that a well-managed OUTRIGHT PURCHASE project can yield a 30% Internal Rate of Return (IRR) and result in a payback of under 4 years with tax benefits and tax incentives. This makes going solar a lucrative investment. A business with serious green ambitions should also definitely look at OUTRIGHT PURCHASE since a 1 MW solar power plant offsets approximately 1400 tonnes of CO2 annually. A wholly owned onsite solar PV system is a visible commitment to sustainability.