Power Purchase Agreement (PPA): Under a residential solar PPA, a solar finance company buys, installs and maintains a solar system on a homeowner’s property. The homeowner purchases the energy generated by the system on a per-kilowatt-hour basis through a 20 to 25 year contract at rates competitive with the local electricity rate. At the end of the term, the customer can choose to extend the PPA, purchase the system at a discount, or have the system removed.
PPAs allow you to go solar for no money down in return for the responsibility of a monthly payment. But, if you choose to make a down payment, you will lower your future monthly payments. With a PPA, you know your monthly solar costs will vary based on production – so, expect higher PPA bills in the summer and lower PPA bills in the winter.