Solar Power Purchase Agreement Market Policy

PPAs afford a mechanism to avoid the upfront capital expenses of installing a solar PV system as well as simplifying the method for the host customer. In some states, however, the PPA model meets regulatory and legislative challenges that would regulate developers as electric utilities. A solar lease is the different form of third-party financing that is very similar to a PPA but does not involve the sale of electrical power. Instead, consumers lease the system as they would a car. In both instances, the system is owned by a third party while the host consumer receives the benefits of solar with little or no up-front costs. These third-party financing rules have quickly become the most popular means for customers to realize the benefits of solar energy. Colorado, for instance, first entered the market in 2010 and by mid-2011 third-party installations designated over 60% of all residential installs and continued to rise to 75% through the first half of 2012. This upward trend is visible throughout states that have proposed third-party financing models.

PPA Considerations For You

SRECs: Solar renewable energy credits (SRECs) point out that a certain amount of power was generated using solar energy. They are usually purchased and sold by load-serving entities (typically regulated utilities) to meet obligations connected with state-level renewable energy standards. SRECs are also used by consumers who will purchase them for marketing claims or other use. Most often in PPAs, SRECs are owned via the developer. When entering into a PPA, it will be important for a customer to clearly understand who owns and can sell the SRECs produced from the PV system, the dangers attendant to SREC ownership, and the tradeoffs with respect to PPA price.

Finance Those Solar Panels

While both third-party financing illustrations provide copious benefits, purchasing a solar panel system outright has its own benefits. Anyone considering installing a solar, solar panel system should consider each of the investment options available to find the best fit.

Upgrading Solar

While the developer is capable for installation, operation, and sustaining of a solar solar panel system, the host customer may need to make investments in their property to support the installation of the system, lower the expense of installation or to comply with local ordinances. This might include, for instance, rooftop repairs or trimming trees that shade the solar panel system.  

Maybe Higher Property Tax

While a PV system may help to raise the site’s property value, there is also a potential increase in property taxes when the property value is reassessed. Different states, however, have different policies in regards to these possible property tax increases.

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