What Is a Power Purchase Agreement?

Would you like to install solar energy at your home in the most convenient way possible? Are you looking for a plan that covers everything you need?

When it comes to buying your own solar energy, you may wonder which equipment suits your taste or where to begin. But don’t worry, you’ll figure it out soon enough once you move forward with the Power Purchase Agreement.

So let’s talk about that one instead. Shall we?

What is Power Purchase Agreement? 

Power Purchase Agreement (PPA) is a financial agreement in which a customer agrees to a contract where all their solar PV needs are being covered by the PPA company.

The customer can choose to pay for two options: either through a fixed monthly amount or, depending on the contract, they pay only for the electricity.

The developer receives income from electricity or from tax credits or any other incentives from the system. The PPA contract usually lasts around 25-35 years. The contract can vary.

The developer is responsible for all of the maintenance during the contract. At the end of the contract, a customer may be able to buy the system from the developer, have the developer remove the solar PV, or even extend the PPA contract.

Why PPA and the Benefits of this Plan?

PPA has the advantage of having a stabilizing factor or financial advantage for the long-term power delivery depending on the market industry.

Benefits of PPA to solar customers include:

  • Capital costs are either none or minimal:
    The developer takes care of everything when it comes to installing your solar photovoltaic (or PV). Without additional costs, the customer can save money.
  • Low energy costs:
    During the contract, the customer can pay at a fixed payment which is at a lower cost than other utility prices. If the utility price happens to rise by then, then the customer would have enough to pay by then.
  • Limited risk:
    The developer is responsible for everything that goes on during the contract. Any questions you have, you may as well as the developer.
  • Sufficient and available tax credits:
    Developers can help you reduce system costs. For example, if public places don’t have taxable income then they would not be able to take advantage of a tax credit.
  • Possible increase in property value:
    Solar PV can help increase residential property value. The contract is what enables solar PV to be installed in their home at little to no cost.

Thinking of checking it out before making a purchase? No problem. We’re here to answer any questions you have. Check out our site to browse for more information at https://blueravensolar.com/idaho/.

What Makes PPA a Better Option?

PPA is an excellent option for these reasons:

  • Low-tax-paying people
    Customers can have up to 30% of an investment tax credit (ITC). Keep in mind if you don’t have enough tax liability, some or even all of ITC can go unused. Customers may not even get to keep the solar PV during the contract.
  • People with credit problems
    A PPA is lower in cost than a solar loan.
  • No down payment
    Customers can save money during a PPA.
  • Variable payment
    Some people prefer to pay only for their electricity, so the PPA company can downsize the solar energy to meet the customer’s needs.
  • Simplistic:
    PPA doesn’t require anything difficult. A customer just has to sign some papers and the developer will do everything. Make sure to consider all options before moving forward with this contract.

Power Purchase Agreement: Let’s Save Energy Today

When you agree to PPA, you are also not only doing yourself a favor but you’re also helping your environment. PPA can help reduce carbon dioxide and save trees. This contract can ensure you’ll live an easy life without having to worry about any malfunction on your solar panel.

It’s as easy as signing a contract and you’re good to go. The best part is you have payment options to choose from, so you never have to worry about your money. Interested in reading more about what Power Purchase Agreement can offer for you? Don’t forget to check us out for more information on our blog!

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