Renewable energy firm Low Carbon has signed a £70m power purchase agreement (PPA) with electricity supplier SmartestEnergy for 23MW of solar projects across the south of England.
The 15-year PPA is part of the first phase of a 65MW generating capacity portfolio, enough to power over 20,000 homes in the region.
The first 23MW of capacity under the PPA will be provided by four solar park projects in Dorset, Devon and the Isle of Wight.
SmartestEnergy said all projects were connected to the grid in March 2013 and are backed by the UK-based asset management group Investec Bank.
Construction of the remaining generating capacity projects is expected to start in the near future.
Low Carbon chief investment officer John Cole said the agreement provides an important foundation for further significant investment in UK renewable generation of about £70m.
"Given the current uncertainty in the market, we are very pleased that SmartestEnergy stood behind its commitment to conclude a PPA with us and we look forward to doing more business with them," Cole added.
SmartestEnergy generation sales manager Iain Robertson said the company’s ability to offer long-term agreements is lucrative for developers and investors.
"Banks are looking for greater security and the fact we are able to provide such long-term deals on both the power generated and the ROC payments is helping projects secure the finance they need to proceed," Robertson added.
In 2012, the London School of Economics (LSE) in a report said that UK needs to invest £330bn by 2030 to protect its economy, secure supply of energy and meet climate change targets.
Image: The PPA will include 23MW of solar park projects in the UK. Photo: Courtesy of SmartestEnergy.