A solar electricity sales contract (PPA) is a financial agreement whereby a developer organizes the planning, approval, financing and installation of a solar installation on the land of a client too little or no cost. The developer sells the electricity produced at a fixed price to the host, which is usually lower than the local distribution company`s retail price. This decrease in the price of electricity is used to compensate for the purchase of electricity from the grid by the customer, while the developer receives the revenues from these electricity sales as well as all tax credits and other incentives of the system. PPAs are typically between 10 and 25 years old and the developer remains responsible for the operation and maintenance of the system for the duration of the agreement. At the end of the PPA contract term, a customer may be able to extend the PPP, have the system removed from the developer or purchase the solar installation from the developer. The structure of your contract varies slightly depending on the type of solar/AAE lease you choose. Solar leasing and solar PPAs are available with 0-down, prepaid and customized down payment options and are available to consumers in about 25 U.S. states. Rental and PPP conditions vary widely between the state and the installer, so explore several options to make sure you choose the financing choice that best suits your needs. While solar leasing and PPAs are often offered as 0-Down agreements, you may also run into custom down payment or prepaid options when you buy for solar energy.
Learn more about the generally proposed solar/AAE rental structures, as well as the pros and cons of solar energy. While the terms “Solar Leasing” and “Solar PPA” are used interchangeably on this site and are very similar in practice, there is an essential difference between the two. With a solar rental, you agree to pay a fixed monthly “rent” or a lease payment, calculated on the basis of the estimated amount of electricity that the system will generate in exchange for the right to use the solar system. With a solar PPA, rather than paying to “rent” the solar panel installation, you agree to buy the electricity generated by the installation at a fixed price per kWh. Duration: Residential leasing is generally valid for 20 to 25 years.