Solarponcis works with Green lenders to direct you to solar energy install financing. Rates are competitive. We can help you arrange a $0 Down financing to keep cash in pocket. Terms range from 10 to 25 years. In most cases, your financing payment is still less than your current solar energy bill today. As energy rates increase year over year, your monthly payment remains the same, and your savings increase. There are many FALSE statements circulating regarding FREE SOLAR. Buyer beware.

Download: Five Ways to Finance a Solar Energy System.

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PPA vs. Finance vs. Cash Purchase

Power Purchase Agreements, or PPA’s as they are called, have become very popular in the residential solar electric market. In the last year alone, PPA’s have replaced the unpopular termed “lease” and have grown to a point that they account for the majority of new residential solar installations.

A Power Purchase Agreement is where a homeowner agrees to have solar panels installed on his/her property, typically the roof, and signs a long-term contract with the solar services provider to purchase the generated power at slightly below the retail electric rate the homeowner would pay its utility service provider.

There are two types of PPA agreements, escalator and fixed price plans. Under the fixed escalator plan, the price the customer pays rises at a predetermined rate, typically between 2% – 5%. This is often lower than projected utility price increases. The fixed price plan, on the other hand, maintains a constant price throughout the term of the PPA saving the customer more as utility prices rise over time. With a fixed PPA, the monthly payments are higher.

Solar PPA’s have become popular due in large part to national solar energy companies that only sell a PPA structured product. Regardless of a homeowner’s situation, energy use, credit score and financial health, national solar energy companies have found the PPA to be a one-size-fits-all product. A PPA allows for them to quickly sell a solar energy system to any homeowner with the least amount of work, and the greatest profits going to the solar energy company.

We have outlined the pros and cons as well as the differences of a PPA vs. a purchase so that you are able to make a more educated solar energy decision that is best for your situation.

A solar PV system leased via a Power Purchase Agreement (PPA) is good if:

  • You don’t want the 30% tax credit or any other incentives or rebates.
  • Your primary objective is to live sustainably and reduce your carbon footprint
  • Your credit is not good enough to qualify to purchase, and you’re OK with sacrificing up to 50% of your savings to the (lease) PPA company.
  • You plan on staying in the home for another 20 years. If selling your home, you are responsible to take any additional steps necessary to either purchase the system and Include it in the sale or find a credit worthy buyer willing to assume the PPA contract.
  • You want limited risk; the developer is responsible for system performance.

Purchasing or financing a solar photovoltaic (PV) system outright is the best option if:

  • You are willing to come up with the full purchase price up front, or you want to finance the system with $0 down at a low interest rate.
  • You are looking to take the 30% federal tax credit and lower your system costs.
  • You want free energy generated by the system for 25+ years.
  • You want to maximize the return on your solar PV investment, especially if you plan on staying at this property over the system’s life
  • You want to significantly increase the value of your property
  • You want to avoid the additional steps involved in selling your property that are associated with leases and PPAs
  • You want to receive ALL the benefit of rebates, tax credits and incentives, such as depreciation and deducting financing interest.
  • Your primary objective is to lock in your energy costs at today’s rates by generating your own electricity, thus saving tens of thousands of dollars.
  • You assume responsibility for maintenance and repairs (these costs are very minimal). Note: solar energy panels are warranted for at least 25 years, inverters are warranted for at least 10 years). There are no moving parts to fail.

The chart below is an example of the cost and savings of an average solar PV system, by type of payment option.

As you can see, the consequences of your payment decision can have a huge impact on the long-term payments and savings of a solar PV system. It is important that you work with a local, reputable solar company, and consult your financial advisor. An experienced solar energy analyst will be knowledgeable about your options and help guide you in the right direction that will save you the most money and give you the confidence to make the very best decision.

In the end, you will be proud and celebrate the changes you have made for yourself, your family, your community and the planet.