What Is The Difference Between A Solar Lease And Ppa

The difference between a solar lease and a solar ppa power purchase agreement is explained in this article.

What is the difference between a solar lease and ppa. We ll help you decide which option is best for you. While the terms solar lease and solar ppa are used interchangeably on this page and are very similar in practice there is a key difference between the two. The difference between a solar lease and solar ppa is simple. With a ppa you pay a fixed price per kwh for power generated.

Both of these financial instruments usually balance things up when. Solar ppa and leases are generally better for people with credit challenges or cannot take advantage of the solar investment tax credit itc. Both solar leases and solar ppas are very similar making it hard to tell the difference between the two. It s a subtle but significant difference whereas the solar lease is an equipment rental and performance agreement versus the solar ppa which is an energy contract where homeowners are paying for the exact kilowatt hours kwh the system produced the previous month.

What s the difference between a solar lease and ppa. With a lease you pay a fixed monthly rent in return for use of the system. With a solar lease you agree to pay a fixed monthly rent or lease payment which is calculated using the estimated amount of electricity the system will produce in. Ppa means you only pay for the electricity you use.