Head of finance and operations Grant Gerrits, who led the team responsible for researching the costs and benefits of a grid-tied solar installation for the production plant, recalls that they were initially apprehensive. The fluctuating exchange rate had a significant effect on the performance of the financial models run, and advancing technologies were reducing photovoltaic (PV) costs and increasing energy harvesting performance.
To alleviate these concerns, Boxlee negotiated a power lease agreement (PLA) with Distributed Power Africa on a PV grid-tied system to supply 100% of the average day shift requirement and fixed a monthly repayment below the energy price to grid suppliers over the next 10 years. ‘We also fixed power generation performance warranties to cover the monthly charge on the PLA and contractually agreed that the risk and reward of system ownership would be transferred to Boxlee at the end of the lease term. There is, however, a clause option to fully purchase the system at any time during the PLA term,’ he states.
According to Grant, these measures helped reduce the perceived risk of ownership, fixed the price of energy for 10 years and thus eliminated annual escalations from grid suppliers, added a sales strategy benefit and introduced an additional source of power that reduces the facility’s reliance on grid suppliers.
Norman Moyo, Distributed Power Africa’s (DPA’s) CEO, explains that the company finances solar solutions at zero upfront cost to customers on a power lease or power purchase basis. As part of the agreement, DPA takes full responsibility for engineering, procurement, construction and operation of the solar plant, which not only means zero technical risks, but also ensures that customers can concentrate on their core business while DPA manages their power.
DPA’s technical team monitors Boxlee’s solar plant remotely, using a cloud-based system that provides a clear oversight of the power plant’s performance from its Network Operation Centre in Zimbabwe. On-site maintenance is scheduled on a bi-annual basis.
DPA’s customer base in the FMCG sector extends to the Massmart and Shoprite retail groups in South Africa and Schweppes (a Coca-Cola company) in Zimbabwe.
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