Considerations for power purchase agreements and leases

Considerations for power purchase agreements and leases

• As with any legal document, it’s important to understand key elements and fine print of the agreement before signing it. PPAs and leases have contractual terms of up to 25 years and the homeowner may have responsibilities during that time such as making sure the system stays free from shade.
• Since the third-party owns the system, the individual or business will not be able to directly take advantage of any incentives like the federal tax credit, Solar Renewable Energy Credits (SRECs), or grants.
• Some PPAs may increase the price you pay for the electricity your system produces over the life of the contract. This is known as an escalation rate, or escalator, for short. Escalator rates can vary by contract and provider.
• Third-party ownership is only available in certain states.