Solar Financing

Power Purchase Agreement (PPA)

With a PPA, a solar company installs, owns, and maintains solar panels on your property. You don’t own the panels but purchase the electricity they generate at a set price per kilowatt-hour (kWh). This price is typically lower than what you would pay to your local power company. PPAs are beneficial because they don’t require a significant upfront investment, and you don’t need to worry about maintaining the panels yourself. PPA contracts generally last 10 to 25 years.

Lease Agreement

A solar lease is similar to a PPA in that a third-party company owns and maintains the solar panel system installed on your property. However, you pay a fixed monthly fee to lease the solar panels rather than paying for the electricity it generates. This fee is based on the estimated amount of electricity the system will produce.

Solar leases often have lower electricity costs than traditional utility rates and require little to no upfront investment. Lease agreements usually last for 15 to 20 years, after which you may have the option to renew the lease, purchase the system, or have it removed.

Ownership

Ownership is self-explanatory: you purchase and own the solar panel system outright by paying upfront or financing it through a loan. Owning the system means you’re responsible for maintenance and upkeep, but you reap all the benefits, such as energy savings, increased property value, and applicable tax credits or incentives at both the local and federal levels.

Once paid off, you and your family are now entirely energy independent for the remaining life of the solar panels, typically lasting around 25 to 30 years. Ownership usually results in the most significant long-term savings and return on investment compared to PPA or lease agreements.