Solar Lease vs Power Purchase Agreement (PPA): What’s the Difference?

With energy costs on the rise, you might have considered going solar, but are worried about the large upfront costs. You're not alone. Many homeowners are turning to solar leases or Power Purchase Agreements (PPAs) as a way to go solar without breaking the bank. Both options require minimal to no upfront costs, but they work differently. Let’s explore how a solar lease differs from a PPA so you can make an informed decision that works best for you.

Overview:

• Most solar leases and PPAs require no money down, allowing you to start saving immediately.
• With a PPA or solar lease, most homeowners can expect to save 10-30% on their energy bills.
• Solar leases and PPA’s are very similar–they differ in how you pay. 
• The solar company owns and maintains the panels whether you choose a solar leasing solution or a PPA.

What is a Solar Power Purchase Agreement?

A Solar Power Purchase Agreement (PPA) is a financial arrangement where a solar company installs and maintains a system on your property at little or no upfront cost to you. Instead of buying the equipment, you agree to purchase the power generated by the panels at a set per-kilowatt-hour price, typically lower than your utility's rate. It's important to note that your bills may fluctuate with the seasons. Since solar panels usually produce more electricity during sunny summer months, you might see higher solar bills in summer compared to winter. This seasonal variation is a key factor to think about when considering a PPA for your home.

PPAs often come with terms ranging from 10 to 25 years, providing long-term energy cost predictability. However, many PPA contracts include an annual rate increase, also called an escalator clause, which is something to keep in mind.

Let’s break down the features of a Power Purchase Agreement:

Rundown of a PPA:

• No upfront costs
• No maintenance responsibilities
• Protection from rising utility rates
• Immediate savings
• Possible escalating rates over time
• Monthly payments may vary depending on energy production

Key Takeaways:

PPAs can be a good option if you want to go solar with no upfront costs and are prepared for a long-term commitment and possible rate increases over time.

What is Solar Leasing?

Solar leasing is an arrangement where you pay a fixed monthly amount to essentially "rent" a solar system installed on your property, much like leasing a car. You don’t own the system, but you get to use it. In a solar lease, the leasing company owns and maintains the system while you benefit from the energy it produces.

Solar leases typically last for 20-25 years, similar to PPAs. The main difference is in the payment structure. With a lease, your monthly payment is fixed, regardless of how much energy the system produces. This can make budgeting easier because you will know exactly what you'll pay each month.

Rundown of a Solar Lease:

• No upfront costs
• No maintenance responsibilities
• Fixed monthly payments that make budgeting easy
• Immediate savings
• Protection from rising utility rates
• No income requirements or credit checks

Key Takeaways:

Solar leasing is an excellent option for homeowners who want to go solar and decrease their monthly energy bill without the hefty upfront investment or ownership responsibilities.

What's the Difference Between Solar Leases and PPAs?

While both solar leases and PPAs allow you to go solar with minimal upfront costs, there are some key differences:

• Payment Structure: Leases have fixed monthly payments, while PPAs charge based on the amount of energy produced.
• Predictability: Lease payments are more predictable, while PPA costs can vary based on system production.
• Rate Increases: PPA rates often increase annually, while lease payments remain the same throughout the duration of your lease.
• Seasonal Variation: PPA customers may see more significant bill fluctuations between summer and winter due to varying energy production.

A Solar Lease from PosiGen

At PosiGen, we offer a unique solar leasing solution that is designed to make clean energy accessible to everyone, regardless of their income or credit score. Our leases are tailored to break down common barriers to solar adoption. There are no credit or income requirements, making solar power available to a wider range of homeowners. We guarantee savings on your energy costs from day one, ensuring that your switch to solar is financially beneficial. With zero upfront costs, you can start saving immediately without any initial investment. Plus, our comprehensive maintenance and insurance coverage means you can enjoy the benefits of solar power without worrying about system upkeep or unexpected repair costs. This all-inclusive approach makes PosiGen's solar leasing program a hassle-free way to embrace clean energy and reduce your utility bills.

Our solar lease program includes:

• No credit or income requirements
• Guaranteed savings on energy costs
• Zero upfront costs
• Comprehensive maintenance and insurance
• Energy efficiency upgrades to maximize savings
• Fixed monthly payments for easier budgeting

Want to learn more about solar leasing to see if it’s a good fit for you? Our experts are ready to answer your questions and help you understand how solar leasing can help embrace clean energy and put money back in your wallet.