There are many different ways to acquire solar power. Two of the most common ways are a solar lease and a solar power purchase agreement (PPA). These are two interesting options, as they are long-term commitments but should end up saving you money in the long run, due to the nature of what you are buying with them; solar panels.
Both of these options work for different people in different situations but to know which option will work best for you, you need to know both the good and the not so good aspects of each option. So, this mini-guide will explain what a solar lease and a solar power purchase agreement are, as well as the pros and cons associated with both options.
A solar lease is much like the renting of a house or the lease of a car. You rent or lease solar power from a company that owns the panels. The company that owns the panels will pay for the installation of the panels and you pay them a rental fee; in addition to your regular solar energy bill cost.
The idea of a lease in general has both supporters and nay-sayers, but with solar there are a lot of things to consider, both positive and negative, before entering into a solar lease.
Pros of a Solar Lease
A solar lease is an option that many people take because that is the only way they can afford solar. Here are the specific pros of having a solar lease:
Cons of a Solar Lease
The biggest issue with leasing solar is that you do not own it and even if you decide to buy the panels at the end of the lease, you are not buying new panels. You are buying the panels that you have used for years, and that isn’t always a good thing.
Here are some of the main cons that are associated with solar leases:
Power Purchase Agreement (PPA)
Power Purchase Agreements, PPAs, are interesting because they are heavily intertwined with solar leases. However, they are not exactly the same thing. PPAs are third-party financiers that help people obtain solar leases. PPA companies can be a third party lender or they can be a lease-lender and an installer. It all depends on the specific company.
Nevertheless, here are the specific pros and cons of PPAs throughout the country:
Pros of a Power Purchase Agreement
Many of the pros of PPAs are the same as solar loans since you usually don’t have a PPA without a solar loan. However, there are a few other pros to this agreement:
Cons of Power Purchase Agreement
PPAs have their place in solar financing, which is why people opt for this type of agreement, especially in states where solar power is heavily encouraged. Unfortunately, there are a couple of cons that go along with PPAs as well:
Ultimately, it is up to you and dependent on your situation, whether a straight solar lease or a power purchase agreement is right for you and your lifestyle. The specific state you live in, your current financial situation, and the availability of these options can fluctuate. So, now that you know the good and the not so good about solar leases and PPAs on a universal scale, it is important to figure out what each option means specifically for your situation.