Solar Lease vs Power Purchase Agreement (PPA)?
There is multiple ways to go solar in the residential solar market, but the most common today is 3rd party ownership. This usually comes down to lease the equipment monthly for 20-25 years, or paying for the actual production of the system thru what is called a Power Purchase Agreement (PPA) for 20-25 years. Solar is a growing industry for multiple reasons, but mainly because your saving money, so you really can lose either way! However, it is important to understand the differences.
A lease and a PPA will have bumper to bumper warranty’s that cover you the term of the agreement. Both will have similar buy out clauses during and at the end of the term of the lease or PPA. The difference comes in the category of expectation and actual payment. Most solar PPA’s are set up to benefit the finance company’s verse the consumer, however their prices tend to be lower, which could be a good thing or a miss leading factor. .
With a PPA you pay for every kw/h of power that the solar system actually produces. You pay for this power at a fixed price per kw/h produced. With a solar lease you know where your payment is, and with a PPA you tend to pay more than the estimated cost. Solar PPA’s payments will very month to month, because some months you have more sun than other months. The production estimates are usually conservative by 5-10%, so when quoted an estimated $200 monthly PPA payment you tend to average closer to $210-$220 a month.
We at Poweraid Solar offer both solar lease’s and PPA’s. If you would like to learn how much you can save by going solar please contact our office for a free consultation. (855)4MY-SOLAR or (949)387-3998 www.poweraidus.com