What's the Difference Between a Solar Lease and a Solar PPA (Power Purchase Agreement)?

A solar lease and a solar PPA are similar in the sense that both are strategies that real estate owners may use to get solar on their roofs for no money down. In the case of a solar PPA you are entering into a long-term energy purchase contract with a solar developer or solar contractor... A PPA contract may have a term of 20 years. Each month you will pay an amount for the renewable energy that the solar system generates... That's it. It SHOULD BE less expensive than what you would buy from your utility.

In the case of the solar lease, you will also not have to come out of pocket to buy the solar system. However, you are not entering into an energy purchase agreement, you are entering into an equipment lease, almost like leasing a car. You get to use the equipment for a period of time, usually 10, 15 or 20 years. During that period you will pay a flat fee each month to use the equipment to generate energy for your building. The flat fee should not change, except for perhaps some annual escalation in the cost of the lease, perhaps pegged to inflation, or 3%.

In most cases, if you can afford to purchase the solar system outright, you may want to evaluate this as an option. The reason that a solar purchase is preferable to a PPA or a solar lease is that you will own the solar system and can get the tax benefits of the solar investment tax credit (ITC), as well as any accelerated depreciation, SRECs, ZRECs or other incentives that may be available in your state or town. The payback with a purchase or financing of a solar system should be much quicker, typically 5-10 years, vs. 20 years or never with a solar PPA or solar lease.

[diogoleviske]

Purchasing is always great.
If nothing breaks on your system for the next 25 years.
The tax rebates apply to you. 90% of the people it doesn’t.
I rather invest the money in something will give me a better return. And do the PPA and have the solar company deal with it if something breaks.

[slacayo]

I bought my system out right from a company called Semper Solaris. Did both roof and solar plus back up (Enphase).

Happy with service and system performing like a champ atm. For those on the fence purchasing if possible is best overall.

[diogoleviske]

People keep ta liking about the benefits of the tax rebates. 90% don’t even qualify for the rebates.

[shawnb]

Had a guy come by today. Their deal was no money out of pocket. They install the panels and then I pay a monthly price that is supposed to be an average of my highest and lowest electricity cost combined, about $77 per month for 25 years. The savings being that the panels produced more electricity in the winter than I use, therefore I received a credit to be used in the summer. Also at night when no power is produced so I'd have to draw from the grid. Problem I see right off is that they install just enough to offset the amount Is normally draw from the grid, which means on days the panels could not generate enough electricity I'd still draw from the grid. Also, it's a 25 year plan, and the panels only last 25 years, and no mention was made of their slow degredation over time of which they'd slowly produce less electricity. So after 25 years, and I won't be around that long, I'm 62 now, the system would need to be replaced, starting all over again.

[pomroy]

I am thinking about this right now and this video was very helpful. Thank you!

[codyroden]

The more I watch these videos the more solar looks like a complete head ache for a minute savings, let’s spend 30k to save 40 bucks a month, 🤦‍♂️ and hope we don’t have anything break and hope that it still works good after we finally pay it off, I think if you have money and really want to save in the long run it’s good but for most people it’s a headache

[brd]

If the solar system is engineered to overproduce actual consumption the utility savings are destroyed.The annual escalator also compounds over time Eroding the 🎉.savings as well

[jesserice]

Actually, with PPA you're purchasing the power the panel produces, not use.

[tusharprasad]

Solar system? If I owned the solar system then I wouldn’t worry about taxes 😏

[kshuffle]

Good info! Quick question or two. If I go solar and buy the panels outright, do I have the option to maintain ownership of the panels and the SRECs it I sell the house? And if the answer is yes, can I also transfer ownership of the panels and SRECs to adult children, family members, etc.?

[karmelabun]

Interested in buying townhome with PPA. After Googling the company it appears that there are a lot issues with CS. Payments are not being posted, member's are paying late fees, ACH is no longer available, invoices are received late therefore creating late fees.... 31 complaints in all. Seller did not reveal this to me yet; I have not gone into depth about their contract. I am unsure if they are having issues with CS and this company. What shall I do? Should I see if he could give pay half and I pay half of the remaining 9 years? I do love the townhome and it's reasonably priced. I just don't want all the hassle with this solar panel company. Realtor email me contract which started at $77 dollars when they first received the panels. So does this mean that my monthly payment would still be based on what I use?

[cjg]

what happens if the roof needs to be replaced? i am looking at a house with Tesla Solar ppa. how much of an ass ache is it to get them there to take the panels off and put them back on and how costly is it? god forbid you find a number and have a conversation with them.

[TrickyBoa]

What if you plan to sell your home within the next 10 years?