From Guest Blogger Jill Clayton: Switching to Solar Without the Upfront Costs

Often times the high investment costs with going solar deter people from making the switch.  Now, however, there are alternatives that do not require the initial lump sum payment.  For example, solar system leasing and Power Purchase Agreements (PPA) are two ways to go solar with little money down, manageable payment plans, and options to purchase the system later on.

LEASING

A solar system lease allows customers to lease solar panels and to pay the solar energy company who installs them a reasonable price per month.  The majority of solar leases range from 10 to 20 years and offer the option to renew the lease for a specified time or purchase the system at market value when the lease is up.  An additional benefit of solar system leasing is that it increases the value of the home.

PPA

Another option available is the Power Purchase Agreement.  A PPA is basically a long-term contract to purchase power from an energy company, usually at a reduced price.  The PPA option offers the bonus of allowing homeowners to only pay for the energy the system produces.  Also, some companies include regular maintenance and upkeep as part of their PPA services in addition to installation.  A PPA, like solar system leases, typically lasts anywhere from 10 to 20 years.  The specifics of PPA offerings can vary and the terms of each contract may differ, but generally-speaking a PPA will lay out the initial low entry cost, an electricity rate schedule, and a yearly escalation rate to adjust for fluctuations in energy costs over the period of the PPA.

A CLOSER LOOK

When deciding whether solar system leasing or a PPA is right for you, you may want to consider a few additional factors.  First, solar system leasing requires customers to pay a monthly fee rather than pay for the amount of power generated on-site like a PPA does.  It is also important to note that a PPA allows an energy company to set an electricity rate that is flat but can increase as the years pass, whereas an energy company can set the lease payments for solar system leasing and also charge for any extra power that is required from their company.  Although there are subtle differences, both options provide excellent ways to go solar with a low entry cost.  To determine which route is best suited for you, contact a solar installer in your area today!