A solar array is a thirty-year asset, so the way you pay for it matters as much as how it is built. The same system can sit on your balance sheet as a capital purchase, sit off it as an operating lease, or sit on someone else's entirely under a power purchase agreement. Each path changes your tax position, your cash flow and the rate you pay per kilowatt-hour.
Meridian is structure-agnostic. Because we design, build and operate, we can own the asset ourselves or hand it to you, and we shape the commercial terms around your priorities rather than a single product we happen to sell.
Power purchase agreements
Under a behind-the-meter PPA, we fund, install and maintain the system on your roof or land at no upfront cost, and you simply buy the electricity it produces at an agreed rate, typically below your grid tariff. You get cheaper, hedged power from day one without touching your capital budget, and the generation asset stays off your balance sheet. Terms usually run seven to twenty-five years, often with an option to buy the system at fair value down the track.
The headline rate is only half the story. The escalator, the annual percentage by which the PPA price rises, determines your real saving over the term. We model the escalator against forecast grid prices so the agreement keeps its margin rather than quietly converging on the market.
Operating lease versus capex
An operating lease lets you spread the cost as a regular operating expense while keeping control of the system and capturing the generation directly. Outright capital purchase costs more upfront but delivers the lowest lifetime cost of energy and the full benefit of the incentives. The right answer depends on your cost of capital, your tax appetite and how long you expect to hold the property.
- PPA: zero upfront, off balance sheet, pay per kilowatt-hour generated
- Operating lease: fixed periodic payments, you keep the generation and control
- Capex purchase: highest upfront, lowest lifetime LCOE, full incentive capture
- Hybrid: capex on storage, PPA on generation, where it suits the numbers
Incentives that change the maths
Australian projects can monetise Small-scale Technology Certificates (STCs) on smaller systems and Large-scale Generation Certificates (LGCs) on systems above 100 kilowatts, both traded through the Clean Energy Regulator. We factor certificate revenue, depreciation and any state programs into the model, and we are explicit about who keeps the certificates, because in a PPA that allocation directly affects your rate.
We price everything back to a levelised cost of energy (LCOE): the all-in cost per kilowatt-hour across the asset's life, including capital, maintenance, inverter replacement and degradation. LCOE is the only number that lets you compare a PPA, a lease and ownership on a like-for-like basis, and it is the figure we put in front of your board.
Bankable and built to last
Financiers lend against certainty, so we package each project with measured load data, conservative yield modelling and a maintenance regime that protects long-term output. For property owners, a well-financed solar asset is also a value lever: it lowers operating costs, supports green lease premiums and improves the building's energy credentials when it comes time to refinance or sell. The structure we choose with you should make the property easier to fund, not harder.
Frequently asked
Under a power purchase agreement we pay for the design, equipment, installation and ongoing maintenance. You pay only for the electricity the system generates, at an agreed rate that is usually below your current grid price.
It depends on the structure. In an ownership or lease model the certificates are generally yours. In a PPA the certificate value is often retained by the asset owner and reflected in a lower per-kilowatt-hour rate, which we make explicit before you sign.
Typical agreements include options to extend, to have the system removed, or to purchase it at fair market value. We set these out at the start so there are no surprises late in the term.