Power Purchase Agreement Solar Panels

What is a solar ppa power purchase agreement.

Power purchase agreement solar panels.

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. A power purchase agreement ppa is a contract to buy power from a renewable generator. With a solar lease you agree to pay a fixed monthly rent or lease payment which is calculated using the estimated amount of electricity the system will produce in exchange for the right to use the solar energy system. A reputable solar company offering you a ppa should very clearly inform you what the price per kwh is for your agreement.

A power purchase agreement is simply an agreement to purchase power at an agreed upon price kwh. A ppa allows your business to reap the benefits of clean energy through a solar pv system without any financial outlay to preserve your capital. Financing a solar panel system with a power purchase agreement otherwise known as a ppa is similar to leasing or renting a solar panel system. Pay a predetermined price for every kilowatt hour of electricity your solar panels generate.

The developer sells the power generated to the host customer at a fixed rate that is typically lower than the local utility s retail rate. A solar ppa is very similar to the solar lease option. Let us take care of the rest. With a solar ppa we install solar panels on your home and sell you the solar power it produces at a lower rate than what your utility can typically provide.

Simply put you get clean solar electricity at a predictable rate. Solar ppa power purchase agreement power purchase agreements have become one of the most popular methods of realising the benefits of solar energy for power consumers. A solar ppa is a long term agreement between you and a solar provider and or installer to lease your roof in return for a lower energy bill. Ppas are particularly important in the renewable sector and are widespread in energy markets across all types of technology.

In fact a ppa is a lease option. A solar power purchase agreement sppa is a financial arrangement in which a third party developer owns operates and maintains the photovoltaic pv system and a host customer agrees to site the system on its property and purchases the system s electric output from the solar services provider for a predetermined period. The installer will typically provide the panels installation and maintenance at zero cost to the homeowner and in return the provider becomes your new utility provider. With a solar ppa instead of paying to rent the solar panel system you agree to purchase the power generated by the system at a set per kwh price.