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American Sentry Solar By American Sentry Solar • April 20, 2016

Don't Fall Prey to a Solar PPA (Power Purchase Agreement)

If you’re in the beginning stages of searching for ways to power your Maryland home with solar, you’ve landed in the right place.  As one of the top solar companies in Maryland, it’s our responsibility to educate homeowner’s on the best ways to generate the highest ROI on their solar power system.  A  PPA (power purchase agreement) may seem like an attractive option at first, but that’s far from the case…



 What is a Solar PPA (Power Purchase Agreement)?

A Solar PPA is very similar to the solar lease option; in fact a PPA is a lease option. The main differences between the two are that at the end of your contract (ball and chain) you have the ability to purchase the system at a fair market value price once your 20-year agreement ends.  You don’t automatically own the solar power system when the contract runs out. The second main difference between a PPA and lease option is that you only pay the solar company for what the solar power system actually produces.

 Originally PPA’s were designed for large-scale commercial projects such as industrial buildings, warehouses, etc. as a way to help offset massive electric bills by selling power at a lower or discounted rate.  So the residential solar PPA market is still a relatively new option, having become more popular in the last 5-8 years due to the no money down option.  However, it’s still a 20- year agreement (contract) where you’re giving away a part of your home for a discounted rate of energy.

Why It's Not Your Best Option

Let’s say the ppa covers half of your electric needs and your utility company covers the other half.  You’ve now split your bill between two companies.  The solar ppa rates work like an escalator and will go up every year.  The problem with these discounted rates is that they rely heavily on utility company rates going up a certain rate over the years.  But if the utility company rates don’t increase at their projected pace, you could end up paying the going rate for your utility company or you could end up paying more than the utility company price due to the PPA price escalator.

By choosing a PPA you:

  • Will not increase your home value
  • Hand over all the tax incentives, grants, and SREC's to the company
  • Enter into a 20 year agreement, where you essentially forfeit your roof to the PPA company
  • Decrease the amount of potential buyers when trying to sell your home

A solar PPA works the same way as a solar lease when it comes to all the tax credits and incentives, you will receive none of them.  So right off the bat there is very little value being presented to you as a homeowner. You’re also handing over SREC’s (Solar Renewable Energy Credits) to the company, which can be a very valuable profit stream for the household.

 Want to learn more? 

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The fact remains the same that purchasing and owning your solar power system is the only way to get the best return on your investment. If you’re unfamiliar with American Sentry Solar, we only offer the option to own your solar power system because we believe it’s best for you the homeowner.  Don’t be fooled by solar ppa’s or leases, always choose to own your piece of the sun!

Owning solar power is more affordable than ever!  Let us show you how you can own your piece of the sun without affecting your budget.

Click Here For A Free Solar Analysis!