What Is The Difference Between A Solar Lease And Ppa

Ppa means you only pay for the electricity you use.

What is the difference between a solar lease and ppa.

It s a subtle but significant difference whereas the solar lease is an equipment rental and performance agreement versus the solar ppa which is an energy contract where homeowners are paying for the exact kilowatt hours kwh the system produced the previous month. What s the difference between a lease and a ppa. We ll help you decide which option is best for you. In this blog we break down how exactly these financing options are different and which one might be the best choice for you.

With a lease you pay a fixed monthly rent in return for use of the system. Both solar leases and solar ppas are very similar making it hard to tell the difference between the two. The main differences between the two are that at the end of your contract ball and chain you have the ability to purchase the system at a fair market value price once your 20 year agreement ends. The main practical distinction between buying and leasing a solar pv system is in ownership.

Solar ppa and leases are generally better for people with credit challenges or cannot take advantage of the solar investment tax credit itc. With a ppa you pay a fixed price per kwh for power generated. The difference between a solar lease and solar ppa is simple. While the terms solar lease and solar ppa are used interchangeably on this page and are very similar in practice there is a key difference between the two.

With a power purchase agreement instead of a fixed monthly fee you pay the solar company for the solar electricity generated by the panels. Solar leases and solar power purchase agreements ppas are two kinds of solar financing options that make it easy to install a solar system on your roof. Both of these financial instruments usually balance things up when. With a lease you pay a monthly leasing fee that is less than your average electric bill and your savings is the difference between the two.

With a solar lease you re paying a fixed monthly payment for the solar panels and system equipment and with a ppa you re simply paying for the solar power the panels produce which will vary from month to month. The difference between a solar lease and a solar ppa power purchase agreement is explained in this article. What s the difference between a solar lease and ppa. If you lease the system or sign a power purchase agreement ppa a third party owns the solar panel system.

If you buy a solar panel system you own the system either outright if purchasing with cash or after repaying your solar loan. Leases and ppas are pretty similar but they have one big difference. Solar leases mean a fixed monthly lease payment.