Equipping your home with solar panels empowers you to move away from grid dependence and take control of your energy costs. However, while the cost of a solar array has continued to decrease, committing to solar still requires financial resources. The good news is that funding a solar panel installation is possible in more ways than just paying the full cost upfront — such as through solar leases, which require a set monthly amount, and solar PPAs, which require payment per kilowatt hour.
Here’s an overview of how both options work to help you understand why Uprise recommends a solar PPA over a lease for your solar panel installation.
What Is A Solar Lease?
When comparing a ppa vs solar lease, the lease functions as a payment plan for solar panels. Similar to leasing a car, leasing solar panels grants the homeowner access to the array without ownership of the panels themselves.
Because the homeowner does not own the panels, they are also not responsible for maintenance. In a lease, the installation company, which maintains ownership of the panels, will conduct maintenance as necessary at the company’s expense.
Some solar leases may allow the homeowner to buy out the system after a specified amount has been paid or a certain period of time has elapsed. A lease may or may not require a down payment, and usually begins upon installation with the first month’s payment and possibly some one-time fees.
What Is A Solar PPA?
A solar PPA, or power purchase agreement, is another method of benefitting from an array for your home without a down payment. With a solar PPA, the panels are installed on your house at no cost to you. The installation company covers installation fees, as well as any maintenance going forward.
In exchange, you purchase your solar energy from the installation company at a set rate, avoiding rate hikes often seen with traditional power companies.
If a home’s energy use is not met by the solar panels, a homeowner may need to purchase any remaining power needs from their normal utility company.
In an Uprise PPA, ownership is very clear; we own the panels until the 20-year PPA term is over, and then you own the panels.
The Pros And Cons
Both solar leases and PPAs make solar accessible to people who are unable or don’t want to pay a sizable deposit or in full. Both options also have pros and cons:
Solar Lease
Pros:
- Predictable monthly payments, as homeowners have a contract stipulating their established rate/monthly costs
- Consistent rates during periods of extreme weather requiring more heat or air conditioning than normal
- Minimal or no upfront cost, getting you operational quickly
Cons:
- Doesn’t reflect energy usage; people using less pay the same as people using more
- Often includes escalators that increase payments over time
- May make it more difficult to sell your home
- The homeowner is not eligible for tax credits on the installation
- Homeowner may never own the panels unless there’s a buyout option
Solar PPA
Pros:
- Provides panels at no cost
- Homeowner gets clean energy and savings without responsibility for setup or maintenance
- The customer owns the panels after 20 years of an Uprise PPA
- Lower energy usage means a lower bill
Cons:
- The bill does not include a fixed rate; monthly costs change with your usage
- No access to the federal tax credit
PPAs and solar leases both provide upfront financial benefits; this means you won’t be able to take tax incentives and rebates. Not paying for panels in full also means you won’t need the incentives!
Should You Choose A Solar PPA Or Lease?
Both solar PPAs and leases offer advantages that an outright purchase of a solar array does not. In general, a solar PPA is more flexible and less expensive than a lease, providing more cost savings. With a PPA, you’ll avoid the burden a lease may create should you decide to move.
Explore Solar Options With The Experts
Solar panels allow homeowners to reduce their monthly utility bills while improving the environment in their community and taking another step toward renewable energy for the planet. With a solar PPA, anyone can access solar panels to begin this journey.
Our experts at Uprise can help you explore your options. We value transparency and the relationships we build with our clients, and will gladly explore all of your options with you to ensure you’re confident in your choice. Contact Uprise to explore our unique PPA program and discover how it can help you lower your bills — and your carbon footprint!