Solar Power Purchase Agreements (PPA) Explained

A power purchase agreement (PPA) is a legal contract between an electricity provider (the company who owns the home solar power system on your property) and a power purchaser (this would be you).

A PPA is a way to finance installation of a solar system on your property by agreeing to purchase the electricity it produces from the company who installed the system, while not owning/paying for the system outright.

The power purchaser could make a very simple decision based on their current electricity bill and the proposed monthly payment the PPA arrangement would require.

If the PPA provided power at a cheaper price then it was a no brainer to enter into such an agreement and get your electricity from a solar system vice your local power plants fossil fuel generated electricity.

This used to only be done on large commercial systems because it wasn’t economical for smaller house-sized systems. This is changing though as some companies are now bringing the benefits of PPAs to homeowners.