What You Don’t Know About Power Purchase Agreements Can Cost You!

A solar Power Purchase Agreement (PPA) is another name for a lease. With a PPA, a solar provider owns, operates, and maintains the solar system on your property and charges you for the energy generated. With a lease, you pay a fixed monthly fee to use a solar system.

But, leaser beware! What you don’t know can cost you. There are several downsides to solar PPAs and leases:

  • PPA or lease payments may consume a large portion of your electric bill savings. A lease means you’ll be making payments for the next 25 years, and there’s no equity built up in it.
  • In some cases, a PPA or lease can offer savings, but they don’t add value to your house as much as a loan or purchasing a solar energy system. 
  • Finding potential home buyers may be difficult if you sell your property during the agreement or lease term. The solar PPA or lease comes with the house and is transferred to the new homeowner.

“A lease encumbers the property. It makes it trickier to sell. Realtors dislike leases because leases don’t add value,” said Mark Miller, A.M. Sun founder and partner. “And the new owners can’t make them remove it.”

You Could End Up Spending More

The goal is to make power via the sun, store it for nighttime, and try not to make more than you need.

“If you don’t analyze it correctly, a PPA or lease could cost you more! You could actually have a higher bill than what you had before solar!” Miller added. “We can give you a return on your investment and reduce your bill. We go through a lot of effort to share all the pertinent information with our customers.”

Solar PPA developers imply that they’ll take care of the bill, but they don’t. Their customers think that they’ll be saving money, but there’s a good chance that they do not. 

Helpful Questions: 

Potential solar customers should ask:

  • How much of your energy profile—solar power—will be going back to the grid?
  • How much less will it cost with solar than without it?
  • How much will my utility bill be after I get solar?

It’s better to work with someone—like A.M. Sun Solar—who has all the options and will consult with you truthfully to your specific situation, because everyone’s solar needs and circumstances are different.

Bottom line: Paying cash makes the most ‘cents!

Is A Solar Lease Ever A Good Idea? 

There are a few circumstances where a lease might make sense.

  • If you have bad credit and you can’t get a loan 
  • If you don’t have the cash to purchase a solar energy system
  • If you can’t use the federal solar tax credit
  • If you just want a lower monthly payment
  • If you do not want a loan to show up on your credit report

Your FREE SOlar Consulatation!

When you’re ready to make the switch to solar or if you’re thinking about adding panels or storage, A.M. Sun Solar offers free consultations! We are no-pressure, local people with outstanding customer service. We will come out and explain all of this to you in relation to your unique needs, for free!

Our team is waiting to talk to you about the best energy solution for your needs. Fill out the form below to schedule your FREE solar consultation!

More about A.M. Sun Solar

A.M. Sun Solar is the local leader in custom solar solutions and installations on the Central Coast. For over two decades, A.M. Sun Solar has provided high quality, cost efficient solar energy to residences and small businesses in San Luis Obispo, Monterey, Santa Barbara, Frenso and Kern Counties. With a wide variety of financing solutions available, affordable pricing, custom solutions and complete installations from permit to interconnection, A.M. Sun Solar is the go-to local solar company on the Central Coast.

Connect with us today at hello@amsunsolar.com, (805) 772-6786, or fill out the form below to get a FREE on-site consultation with one of our friendly solar experts.