AI Renewable’s “Edge” – NO Capital Cost to the Customer
We use the proceeds from our flow-through limited partnerships, to fund all of the up-front costs associated with the development of a project (soft costs). We then use long-term debt for the construction costs, until it is commercially operational. Specifically, it means that we finance everything from the preliminary engineering work and feasibility studies, through to the equipment purchasing and installation, providing our customer with an operating project, at no up-front cost to them.
In the case of a CHP system, once we have financed the development and installation, the customer can proceed in one of two ways:
Power Purchase Agreement (“PPA”)
Most commonly, the customer buys their electricity and heat from us at a 10 – 20% discount to their current electric bill, through a long-term PPA, where we maintain and service our equipment over a 10 – 30-year term, or;
System Development Agreement (“SDA”)
In some cases, the customer may elect to buy the equipment from us through an SDA, whereby they can use the electricity and heat produced from the CHP system and receive a tax benefit from the CHP purchase. The customer can elect to enter into an operations and maintenance agreement with one of our partners or service the equipment themselves.
CHP provides a reliable source of energy because the facility is always connected to both the CHP system and the power grid. The CHP system provides the “baseload” or 24/7 electrical needs for the day-to-day operation of the facility. The energy required from the power grid is therefore reduced to only needing to supply “peak” electricity demands – which is the electricity needed over and above the baseload.
In a heavy storm or power outage, the CHP system – which runs on natural gas – continues to provide a baseload supply of energy to the facility. This means services such as elevators, hallway or garage lighting, refrigeration and electrical outlets can continue to operate without interruption, even though the power grid is down.