Purchase of solar power

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4 FAQs about Purchase of solar power

Do you need a solar power purchase agreement?

Many homeowners, businesses, schools, or nonprofits exploring solar energy think of buying a solar array outright. But there is another model gaining popularity: the solar power purchase agreement (PPA). Under a solar PPA, you get the benefits of solar electricity without owning the system.

What is a solar power purchase agreement (PPA)?

That's the basic promise of a power purchase agreement (PPA). The concept is simple: A solar company installs and owns the system on your property. You pay them for the electricity it produces, usually at a rate lower than your utility charges. No ownership, no maintenance, immediate savings. It's solar access without the solar investment.

Should you buy a solar system from a PPA?

Because the solar provider owns the system, you don't receive the federal or state tax credits, rebates, or other ownership-based incentives. Those benefits go to the owner, the PPA provider. For homeowners or organizations able to purchase a system directly, those incentives often make ownership far more financially attractive in the long run.

Do solar panels save money?

Because solar panels typically produce more electricity during the summer than during the winter, most people experience higher PPA payments during the summer months—but they also save more on electric bills. Power purchase agreements are widely used for commercial and utility-scale solar projects.

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