According to SEIA research, solar panel prices have fallen by over 70% in the last ten years, but it’s still an expensive investment.
Solar energy is an excellent way to help conserve the environment and slow global warming, and it can save you a ton of money in the process.
There’s no doubt that your solar panel installation will pay for itself within 20 years due to monthly savings on electricity bills, but what if you can’t afford it right now.
You have a few options when it comes to getting on board with renewable solar energy, including solar power purchase agreements.
Find out more about PPAs here.
Solar Power Purchase Agreements 101
A solar PPA is a financial arrangement between a power provider and a homeowner. The developer arranges for everything to do with installing the solar panels on the customer’s property.
Usually, there’s a small fee involved, and the developer retains ownership of the installation. They then sell the power back to the host customer at a fixed rate.
Typically, this fee is much cheaper than conventional grid-supplied electricity. The developer benefits from the tax incentives they get from installing the system and from selling power to other customers at the usual rate.
According to this fastest growing solar company, you can also get a free installation, and 18 months of free solar power before you pay any of the costs involved. Plus, you’ll own the solar installation from the outset.
How Long Is a PPA Contract?
Most PPAs last from 10 to 25 years and the homeowner can extend the contract at the end of the term, or cancel and have the developer remove the solar panels.
The homeowner can also opt to purchase the solar installation from the power company at the end of the contract. This means they get to enjoy the benefits of net-metering or off-grid solar ownership, but they won’t get any tax benefits.
The developer maintains and oversees the solar panels throughout the agreement.
Is a Power Purchase Agreement a Good Fit for You?
One of the major drawbacks of a PPA is that you might struggle to sell your home if prospective buyers don’t like the idea of a PPA. If you don’t intend to sell any time soon, you could benefit from a PPA as follows:
- Reduced energy costs and fixed prices
- Having a third party to install and maintain the energy system
A PPA is a long-term agreement, so that might not suit all homeowners either.
More Bright Ideas
Apart from solar power purchase agreements, you could consider net metering or go off the grid for optimum savings with solar power. You could also opt for other forms of renewable energy such as natural gas, or wind power.
If you want to contribute toward lowering global carbon emissions, you can even help by reducing your use of fossil fuels in daily life. Try installing a smart home energy management system, or set up a carpool with co-workers.
There’s no limit to what you can do when you set your mind to it. Browse our blog for more inspiration.