A solar PPA allows you to avoid the complicated and costly issues of the installation process for solar power systems. The financial agreement enables a third-party developer that operates and owns a PV system to lease the energy to a consumer. The deal is beneficial to both parties. It allows the service provider to receive tax credits, not to mention the extra income. Also, you can save money by purchasing power at a significantly lower price, compared to your local utility company.
You will likely encounter many challenges when you want to install a solar power system on your property. Performance risks, high capital costs, and maintenance are just a few of the obstacles you will face in the process. However, when you sign a PPA, your plant’s host is responsible for the permits, design, finance and the installation of the system.
How a Solar PPA Works
When you sign the agreement, you agree on having solar panels set up on your property with a company that provides solar power services. They can last from 7 to 25 years, depending on the type of agreement. The developer of the system will be responsible for its operation and maintenance throughout the duration of the agreement. When you sign your contract, the company has to set up your system within 3-6 months.
Once your contract has expired, you can choose to extend your PPA, remove the system from your property, or purchase your system from the developer. You can opt for a fixed price plan or an escalator plan.
Fixed Solar Price Plan
If you sign this type of agreement, you will be able to pay the same price throughout the entirety of your PPA. Thus, you will be able to save money when utility rates ultimately increase.
Escalator Solar Plan
You will have to pay an increased price at a predetermined percentage to make up for maintenance costs and inflation. That means you will have a 2–5% price-hike each year. However, you will still be able to save money as utility rates will probably see a higher increase in price.
Benefits of a Solar PPA
No Added Costs
A great thing about signing a solar PPA is that you will only pay for the amount of energy you use — no more, no less. Since the company whose services you’re using pays for the maintenance and everything else, there are no extra charges on your bill.
You won’t have to think about installing, design and paying for permits of your solar power system, because the developer is responsible for everything. Also, you don’t have to worry about the costs of reparation, as it’s already included in your monthly bill.
Money Savings Solar Plan
If you have a solar power system installed in Florida, you are eligible for many benefits and tax breaks. Also, your energy bills will have a low, fixed price during the entirety of your contract. Lastly, solar PPAs will increase the value of your property at no upfront costs.
Final Solar Thoughts
As you can tell, there are numerous benefits of a Solar PPA, for both parties. Although the developers have to front the cost of the system, there is a profit in it for them. However, you will be able to reduce your ecological footprint, and instantly save money by locking in your energy bills.