Thinking about going solar but unsure about the upfront costs? A Power Purchase Agreement (PPA) might be the solution you’re looking for. A PPA is a financial arrangement that allows homeowners to install solar panels with little to no upfront cost, making renewable energy more accessible. At Sunday Energy, our goal is to make solar energy accessible to everyone, so PPAs are an option we offer. But before signing on the dotted line, here’s everything you need to know.
What Is a Power Purchase Agreement?
In a solar PPA, a third-party company installs and owns the solar panel system on your property. However, you don’t pay for the panels themselves. Instead, you agree to purchase the electricity they produce at a fixed rate, usually lower than your local utility rate. These agreements typically last 15 to 25 years.
Key Benefits
- No Upfront Costs: The solar provider handles installation, maintenance, and system performance.
- Lower Monthly Bills: You pay a predictable monthly rate for electricity, often less than your current utility bill.
- Maintenance-Free: Because the installer owns the system, they’re responsible for repairs and upkeep.
Things to Watch Out For
- Long-Term Commitment: A PPA locks you into a contract for many years. Make sure you’re comfortable with the terms before signing on.
- Escalation Clauses: Some agreements include a price increase each year. Even a 2–3% annual rise can add up over time.
- Home Sale Complications: If you decide to sell your home, the new buyer must agree to take over the PPA, or you may have to pay a buyout fee.
Is a PPA Right for You?
If you want the benefits of solar without the cost and responsibility of ownership, a PPA can be a smart option. However, it won’t qualify you for solar tax credits or incentives; those go to the system owner. If you’re planning to stay in your home long-term and want to maximize savings, purchasing or financing a solar system may be a viable and more cost-effective option.
Power Purchase Agreement and Solar Panels | Sunday Energy
A solar PPA can be a great way to go green and save money, but it’s not one-size-fits-all. Review the fine print, compare options, and consult a trusted solar advisor to make the best decision for your home.