PPA = Power Purchase Agreement
Lease = Operating Lease on Equipment
In recent years, third party ownership models for financing have become mainstream alternatives. The principal benefits that have driven growth of the use of PPAs and Leases are:
- 100% financing, off balance sheet
- Allow for capture of tax benefits by a third party and passed through in the form of a lower payment
- Shift performance risk to 3rd party owner - you only pay if the system is producing.
With these “solar-as-a-service” agreements, you are essentially switching electric providers to a solar provider for a portion of your electric bills.
PPAs and Leases require that good credit, minimum project size, positive cashflows, and other criteria are met. Contact Us to find out if this option is feasible for your project.