Take-or-pay clauses — how they sabotage solar (and how to remove them)
Take-or-pay clauses penalise you for using less grid electricity than forecast. They can turn a solar PV project from a money-maker into a money-loser by triggering volume penalties. We refuse to install solar without removing the clause first.
How they work
A standard commercial energy supply contract often includes a volume tolerance band — typically ±10% of the forecast annual consumption. If your actual usage falls below the minimum band, the supplier charges you for the difference at the contract rate.
The solar collision
Solar PV is the most common scenario where take-or-pay hurts. A reasonably-sized commercial solar array displaces 20-40% of your annual grid imports, which will push you outside the band — and the supplier will charge you for energy you didn't consume.
How to remove the clause
- Negotiate a zero-volume-tolerance contract at renewal.
- Renegotiate mid-contract where solar is planned.
- Move to flex or multipurchase, which typically operate with wider tolerance.
Bottom line
We refuse to install commercial solar on a site with an active take-or-pay clause. The kit can't do its job. Where the clause exists, we renegotiate the supply contract first.
Take-or-pay clauses — how they sabotage solar (and how to remove them) — quick questions
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