Solar Lease VS. PPA

Who Can Benefit From a Solar Lease or PPA

Purchasing your solar panel is the best way to maximize your savings. If you don’t own your PV system you are not eligible to utilize the tax credits or incentives. However, a Solar PPA  (power purchase agreement) or Lease might be a good second option for some. There are Solar Lease and PPA options for residential, public, and commercial installs. Those that would benefit most from a Solar Lease or PPA:

  • Don’t benefit from the tax credit or incentives.
  • If you require a very large system.
  • Don’t qualify for financing.
  • If you want a system that is operations and maintenance-free.

Differences Between a Solar Lease and PPA

One of the main differences between a Solar Lease and a PPA is that in a Lease you’re renting the system and in a PPA you’ll pay per kWh your system produces. In a Lease, your payments will stay the same month to a month whereas with a PPA your payments will fluctuate with your system’s production.

Another difference is Solar Leases don’t give you an option to buy whereas PPA’s do. The highest ROI (return of investment) is in system ownership.  If the reason you aren’t buying your system now is your inability to get financed, see if you’re able to buy your system later when you are able to get financed or purchase it outright.

Solar Lease and PPA Similarities

Both Leases and PPAs offer zero money down. This gives purchasers the advantage of immediate savings. Just keep in mind that most solar companies can get you financed to own your system for zero down as well.

Solar Leases and  PPAs offer the option of a fixed and accelerator rate. Accelerator rates usually start out lower but mean your payment will go up every year. Fixed rates typically start off higher, but mean your payment will never increase. In any case, you can look up your state’s expected electric rate increase at the US Energy Information Administrations’ website to see how your deal measures up.

With either Solar Lease or PPA, you will have access to free energy monitoring. You’ll know just how well your system is producing, usually with an app for your phone and/or computer login access.

The terms of a Solar PPA or Lease are both between 20 and 30 years. It’s a good idea to see what options are offered by the company if you need or want to sell your home.

One of the main benefits of a Solar Lease or PPA is that the company maintains, insures, and monitors the operations for the system.

Things to Ask About Your Lease or PPA

Production Guarantee

Production guarantees simply mean that if your system is not producing then the solar company will refund you the difference.


It’s important to know what is covered in your warranty. Make sure the terms are clear.

Solar Design

Double-check your solar design. Make sure it looks the same as your initial consultation. Solar Panel placement matters and a change in design can have an effect on your energy production.

Panel Quality

No two panels are the same. The higher the power rating the more efficient the panel.

Hirst Solar Consulting is ready to help you find your perfect solar solution. Contact us for your free solar consultation. Want to learn more about solar? Visit our blog or check out these resources. Solar is an investment. With terms of 20-30 years, you need to make sure you’re getting the best price, the most efficient products, and an inclusive warranty from a reputable company you can trust.

What say you?