Japan-based denim company Kaihara Co Ltd has agreed to buy power from a 2.2 MW solar plant under development by Japanese financial services giant Orix, via a long-term power purchase agreement (PPA).
According to Orix, this is its largest deal secured for an unsubsidized solar project in Japan to date. This market segment, on the other hand, has always been neglected by solar energy developers, as generous feed-in tariffs have been granted to large scale PV over the past two decades.
The solar facility will supply power to Kaihara’s Sanwa factory, located in Jinseki, in the Hiroshima prefecture, and will cover around 12% of its electricity demand. “In addition, through … procurement capability utilizing Orix’s economies of scale, the introduction of this large scale solar power generation system is expected to allow the electricity charge per unit procured through this PPA model to be reduced by approximately 25% at [the] Sanwa factory compared to the past rate,” Orix said in a statement.
The company had launched its PPA business model in August 2020 and previously implemented its PPA business model at several supermarkets in Gifu and Shizuoka prefectures. “In this model, Orix is responsible for installing and operating solar power generation systems, lithium-ion storage batteries, and energy management systems, and supplying the generated electricity to consumers,” it explained at the time.
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