What Is The Difference Between A Solar Lease And Ppa

With a lease you pay a fixed monthly rent in return for use of the system.

What is the difference between a solar lease and ppa.

Both of these financial instruments usually balance things up when. While the terms solar lease and solar ppa are used interchangeably on this page and are very similar in practice there is a key difference between the two. Solar ppa and leases are generally better for people with credit challenges or cannot take advantage of the solar investment tax credit itc. If you buy a solar panel system you own the system either outright if purchasing with cash or after repaying your solar loan.

In this blog we break down how exactly these financing options are different and which one might be the best choice for you. Ppa means you only pay for the electricity you use. It s a subtle but significant difference whereas the solar lease is an equipment rental and performance agreement versus the solar ppa which is an energy contract where homeowners are paying for the exact kilowatt hours kwh the system produced the previous month. A solar ppa is very similar to the solar lease option.

With a lease you pay a monthly leasing fee that is less than your average electric bill and your savings is the difference between the two. With a solar lease you re paying a fixed monthly payment for the solar panels and system equipment and with a ppa you re simply paying for the solar power the panels produce which will vary from month to month. What s the difference between a lease and a ppa. Solar leases and solar power purchase agreements ppas are two kinds of solar financing options that make it easy to install a solar system on your roof.

The difference between a solar lease and solar ppa is simple. What s the difference between a solar lease and ppa. 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. We ll help you decide which option is best for you.

Leases and ppas are pretty similar but they have one big difference. The main practical distinction between buying and leasing a solar pv system is in ownership. Both solar leases and solar ppas are very similar making it hard to tell the difference between the two. With a power purchase agreement instead of a fixed monthly fee you pay the solar company for the solar electricity generated by the panels.

Solar leases mean a fixed monthly lease payment. With a ppa you pay a fixed price per kwh for power generated. In fact a ppa is a lease option.