When you’re researching leasing versus PPA, you’ll often see them coupled together. While you don’t own the system in either scenario, that’s often where the similarities end. With a PPA, the equipment belongs to the company and instead of a monthly payment for the system, the homeowner pays a negotiated price for the energy produced, which typically varies from month-to-month.
When it comes to PPA, you have essentially provided the roof or yard of your home to a company, in exchange for reduced energy rates you pay them. This means you have little say in the system installed, you can’t claim the tax credits, and the provider may decide you don’t qualify because your property’s energy potential doesn’t benefit their investment.
PPAs are an agreement that you buy the all the energy the system on your property produces. If your personal energy needs decrease, you’re still on the hook for the full amount. Terms may not be negotiable and this arrangement requires the buyer of a home to accept the agreement, making it the least attractive of the three if reselling is a consideration.
It’s important to know what option for acquiring a system is likely to work best for you before going with a particular plan. Buying is best if you have the financial maneuverability and leasing works well if you don’t have the money to put down and prefer an essentially flat monthly rate. PPAs, however, take all the control away from you and provide you with a variable monthly bill.
Since joining SunPower® by Alternative Energy Systems, I’ve learned that we don’t offer PPAs when it comes to residential installations. The drawbacks in obtaining a system via a PPA are far greater than if you opt to lease or buy, as mentioned in the article above. We want to make sure you carefully consider your options before committing to a home upgrade that should last decades.