What is a Solar Power Purchase Agreement (PPA)?



In effect, you have a power purchase agreement with your current utility company.  Your utility sets the price and you agree to pay for what you use at that price.  With a solar PPA, you agree to purchase the power the panels produce.  The price is lower than the average price the utility charges you.  Again, the advantage used to be: no money down for the equipment.  These days, you can purchase a system, keep your tax credit, and pay nothing for 12 months.  The disadvantages are similar to a lease: you’ll pay for 20 years and still own nothing, and there will likely be an escalator factor built into the contract so your cost will continue to rise every year.