Power Purchase Agreement (PPA)
Solar with no up-front cost
A third party pays for installation, and owns, operates, and maintains the system. You make an agreement to purchase energy from that system, locking in lower energy costs for the long term. At the end of the contract, you can purchase the system, negotiate another PPA, or have the system removed.
- No capital investment
- Only pay for electricity consumed
- No responsibility for operations or maintenance
- Lower energy rates than standard electric
Solar with low, or no up-front cost
You lease a solar panel system, and lower your electric bill by using the energy it generates. This typically offers immediate utility savings, and leads to increased savings over time as traditional energy costs rise. At the end of the lease you can purchase the system at a reduced cost, renew the lease, or have the system removed.
- Financing is often lower cost than a PPA
- Lessor tax benefits can reduce lease payment
- Minimal up-front payments reduce investment
- Benefit from available incentives
The fastest, simplest path to solar
You purchase a solar panel system outright and can begin installation as soon as you’re ready. Cash purchase offers complete access to federal, state, and local solar initiatives where available, which can offset solar project cost significantly. Cash purchase typically offers the maximum return on a solar investment.
- Access to all solar incentives available
- Fewer parties involved offers greater potential savings
- Reduces total time required for installation
Generally offers maximum return on investment
PACE – Property Assessed Clean Energy – Based on Equity Tax assessment:
PACE – own a solar system with no upfront costs, get free electricity for 20 years, plus receive any available solar rebates and tax incentives.
- No liability on the balance sheet, therefore the asset is immediately
- Transfer the tax assessment
- No upfront costs.
- Easier credit. Because PACE is secured through a special tax assessment,
- You own the solar system. With a solar PPA, you’re only renting the solar system for 15 to 20 years. You do save on your electricity bill with solar PPAs, but not as much as when you own the system. Plus, when you own the solar installation, you get to keep it running for as long as it lasts — typically 25 to 30 years, or even longer.
- You get to keep the rebates and tax incentives.
- It’s a long-term loan. PACE loans can vary by the lender, but they’re typically a 20-year loan.
- The special tax assessment is transferable. The solar system always stays with the original PACE property until the loan is paid in full.