Questions to ask about leases and power purchase agreements

By Sam Polino on September 18, 2017
  • Does the agreement include all components in the SEIA Transaction Disclosures?
  • What is the term of the agreement?
  • What is the cost of energy ($/kWh) in the agreement or the monthly payment?
  • What assumption does the proposal use to project how much my utility electricity costs will go up over time? (The assumption is usually based on 10- or 20-year historic information, but can vary by provider and even by proposal. The higher the assumed rate of increase, the better the economics will look in the proposal.)
  • Is there an escalator for my monthly payments? In other words, will my monthly payment go up during the life of the agreement? If so, by how much and how often? If your payment goes up over time, the cost of electricity from your utility has to go up at a higher rate than your solar payment in order for you to save money with the solar system.
  • What are my options if I decide to sell my house before the agreement ends?
  • What are my options when the agreement ends?
  • How long are roof penetrations warrantied?
  • Why this is important because an installation warranty describes how long an installer’s work is covered against problems encountered due to the act of installing components on the home (e.g., roof leaks). You should determine if your agreement covers that for the entire term or for a shorter period.
  • Will system components be covered for the life of the term or just for the manufacturer’s warranty length? What additional costs apply if equipment should fail after warranties expire? This is important because equipment warranties can range from 10 to 25 years. If you have a 20-year term on your agreement but the inverter (for example) is covered for 10 years, what happens in year 11 if it fails? Do you incur additional charges?
  • Is additional insurance coverage provided by the company in the agreement?
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