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Overview
A Power Purchase Agreement (PPA) is an option with no ownership involved for the customer. They are leasing the system from an outside company and will be able to have a PV system installed at no upfront cost to them. Sunrun will lock the homeowner in for a set kwh rate for all of their electricity that is generated by the PV system. They will always save money as long as the PPA rate is lower than what the homeowner currently pays the utility.
The rate will have options for an annual escalator increase of 0% - 2.9%. The warranties and maintenance are fully backed by Sunrun.
For more information about PPA options ESP offers, please reach out to your ESP Account Executive.
Tax Credit: Homeowner is not eligible because Sunrun maintains ownership of the system throughout the term, and is responsible for keeping the system working to its fullest ability.
Each month, the homeowner will pay for the power produced by the system - not how much power is consumed. The Finance Company will charge the homeowner a fixed kilowatt-per-hour rate for all the power produced by the system. Each year this kilowatt-hour rate will increase by 0% - 2.9%.
Monitoring & Warranty: Sunrun’s warranty and customer service are available to the customer for the life of their system.
Pearl Certification & Service: Service Plans are not offered for Lease/PPA options. Pearl Certification does not apply because the homeowner does not own the system.
Pros and Cons of PPAs
- A good option for those unable to claim any tax credit (fixed income) because Sunrun claims the tax credit and passes along the savings. The homeowner can switch to cheaper clean power for no upfront cost and no liability besides simply paying the bill.
- Does not show up as debt on their credit report, just the one initial credit check.
- The system is fully maintained and monitored by Sunrun, so if anything goes wrong with the system the finance company is responsible to fix it at no cost to the homeowners.
- The homeowner doesn’t get to own the system and add equity to their home. Although the agreement is completely transferable in a home sale, the homeowner does not get the added benefit of Pearl Certification to add the value of the system to their home since it isn’t their asset.
- The homeowner can buy out the solar system, but often it’s on less favorable terms than a loan or cash purchase.