Solar Power Lease Agreement
Under an AAE agreement, consumers make monthly payments based on the amount of electricity generated by the system. This agreement is aimed at vertically integrated companies that finance and install systems. Here`s the difference between a solar lease and simple English solar PPA, but most of you need to keep reading to fully understand. To participate in these efforts and see more of our work on solar financing, click here. At the end of the term: when your contract expires, you can either buy the system directly, have the leasing company removed, or leave the system on site and renew the contract with the owner. Different solar companies have different options from different partners. The solar energy that generates your panels reduces your electricity bill (or eliminates it!). A solar lease payment or monthly PPP will generally be less than what your monthly electricity bill would be without solar. Solar PPA: You pay a fixed price per kWh for the electricity generated by the system. In most cases, your monthly bill increases or falls with the amount of energy generated by your system. The amount you pay for your solar lease or solar PPP payment is increased each year.
The amount of your payment will be increased is fixed in your solar contract. Price escalators for solar leasing and PPAs are generally between 3% and 5%. With a solar rental, your payment would remain the same throughout the year, no matter how much or how little electricity the solar modules generate. While leasing may not save you as much as a long-term AAE, with flat rent, it`s much easier to pay for your electricity. You don`t have to worry about fluctuations in monthly payments and you can easily create your budget around your standard monthly payment. You should only consider a solar or solar PPA if you don`t have the money to buy solar or if you are not eligible for a solar credit. If so, then solar leasing and solar PPAs might be the best way for you to go to solar power. System Purchase: You can purchase the solar installation at any time during the duration of the rental at the price or fair value specified in your contract, depending on the highest value. Whether you win a solar PPP or a solar lease, you still save money on your electricity bill while using clean, renewable energy.