What is a Solar Power Purchase Agreement (PPA)?

What is a Solar Power Purchase Agreement (PPA)?

“I’d love to switch to solar energy… but I just can’t afford the installation costs.”

At SnapSolar, this is one of the most common objections we hear from customers who love the idea of solar but can’t make the upfront financial commitment.

It’s frustrating — even though you know your solar system will pay for itself over the first few years, you’re still locked out because of that initial price tag. But what if there was a way to gain access to solar without that upfront cost?

Well, there is. It’s called a solar PPA, and in this article, we’ll explore precisely what it is, how it works, and how you can use it to access solar in a more affordable way.

With a solar PPA, your solar energy provider will install a solar panel system on your property. You’ll pay for the electricity it generates, at a rate you agree on beforehand, and in return, your energy provider will completely cover the upfront cost of buying and installing the solar panels, along with the ongoing costs of maintaining them.

If you’re struggling to save up the required amount of money to purchase and install solar panels, a PPA can be the perfect solution. This is because a PPA allows you to tap into the many benefits of solar power, such as:

  • Lower and more stable electricity prices over time
  • More sustainable and environmentally-friendly
  • Greater energy independence

At the same time, you’ll avoid the large upfront costs typically associated with solar panel installation. For solar energy providers, it’s a good deal too, as the money you pay them helps fund their growth and development.

What’s the difference between a solar PPA and leasing your solar panels? The two concepts can appear very similar at first glance, but there are some key differences.

The main thing to note is that, with a lease, you pay a fixed monthly fee to use your solar system. With a solar PPA, on the other hand, you pay according to how much energy you generate — on a per kilowatt-hour basis.

There are pros and cons to each approach, so it’s worth taking the time to figure out your personal situation, needs, and goals before committing to one or the other.

Entering a solar PPA can be a daunting decision, and it’s not one you should simply dive into. Take some time to consider things like:

  • The length of your contract and any terms and conditions
  • The pricing — will you be paying fair rates?
  • What kind of services will be provided? For example, how much maintenance work will your energy provider agree to do?
  • Familiarise yourself with any local regulations and laws, and how these might impact your solar system

A solar PPA can be an excellent choice if you want to tap into the power of solar and start building your own solar infrastructure but want to avoid a large, one-off payment to install the panels.

At SnapSolar, we can help you learn more about a solar PPA and whether it’s the right option for you. We can also help you explore other options to save money on your solar installation costs, and to manage these costs by accessing government rebates and incentives.

We’ve already done this for countless households and businesses in Mackay and the surrounding Queensland area. Get in touch to find out how we can help you.

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