PPA And You Today For Your Solar Cost Investment

There are a few different ways to find your way into a new solar panel system with cost in mind.  Case upfront is always the best route if you can afford it.  However, not all of us can front those costs for solar.  Still, you in luck, try a PPA to get into that solar energy you've been craving!

What Is A Power Purchase Agreement?

A solar power purchase agreement (PPA) is a financial arrangement where a developer plans for the design, permitting, financing and installation of a solar energy system on a customer’s property at little to no expense. The developer sells the power produced to the host customer at a fixed rate that is typically lower than the local utility’s retail rate. This lower electricity price assists to offset the customer’s purchase of electricity from the grid while the developer receives the income from these sales of electricity as well as any tax credits and other incentives produced from the system. PPAs typically range from 10 to 25 years and the developer remains responsible for the operation and maintenance of the system for the term of the agreement. At the conclusion of the PPA contract term, a customer may be able to extend the PPA, have the developer remove the system or choose to buy the solar energy system from the developer.

Benefits of PPAs to Solar Customers

Capital 

The developer handles the upfront charges of sizing, procuring and installing the solar panel system. Without any upfront cash down, the host consumer can adopt solar and begin saving money as soon as the system becomes operational.

Reduced Utility Bills

Solar PPAs implement a fixed, predictable expense of electricity for the duration of the agreement and are set-up in one of two ways. Under the fixed incline plan, the price the customer pays rises at a predetermined rate, typically within 2% - 5%. This is often lower than the projected utility cost increases. The fixed price plan, on the other hand, manages a constant price throughout the term of the PPA saving the consumer more as utility prices rise over time.

Limited Risky Business

The developer is accountable for system performance and operating contingency.

 
Available Tax Credits

Developers are typically better positioned to use available tax credits to reduce system payments.  For example, municipal hosts and other public entities with no taxable benefits would not otherwise be able to take benefit of the Section 48 Investment Tax Credit.

Potential Increase In Property Value

A solar panel system has been shown to enhance residential property values. The long-term nature of these arrangements allows PPAs to be assigned with the property and thus provides customers a means to invest in their home at little or no expense.

Want to save and be guided by experts? Go to HahaSmart.com and try our price checker tool. It tells you how much solar power you need and how much you can save on your energy bills each month. Please visit our solar blog to find out more about the benefits of going solar.