A solar lease or power purchase agreement (PPA) can make owning home solar panels cheaper and easier. Many companies handle all of the paperwork, national grid connection, and other hurdles surrounding installing a residential solar system.
But before you sign a solar power agreement, there are a lot of things to consider. Most solar leases or power purchase agreements (PPA) involve a 15-20 year term, which is quite the commitment. If you’re looking into signing a solar lease or PPA, it’s best to make an informed decision and choose a company you can trust so you can protect yourself from unexpected costs.
Make the best decision for your home with these five tips before signing a solar power lease or PPA.
- Thoroughly read the contract. A 15-20 year commitment is a long time. While there are many benefits to installing a solar power system on your rooftop, you need to make sure that the benefits detailed are fair and protect you from any potential mishaps. Read your contract several times and check that it’s not missing anything you expected. If your solar representative is promising you things that aren’t listed in your contract, remember that verbal agreements don’t always hold up after you sign the dotted line.
- Research tax credits, rebates, and refunds. If you were to go about it alone and install a home solar power system without a third-party company, you could be entitled to various tax credits, rebates, and incentives, depending on what state you live in. On top of that, if you produce more energy than you use, you’ll receive a credit from your local utility company for the excess power you added to the grid. These incentives vary from state to state so be sure you do some research. Inquire with your solar power company about whether or not you will remain entitled to these benefits if you sign a solar lease or PPA.
- Be sure you’re receiving professional service. If you’re signing up with a solar company, it’s best to double-check that its credentials are in order. You wouldn’t want an unlicensed worker installing or maintaining your panels. Solar power systems are complex. Not to mention, if not properly installed, they can damage your roof. Before signing up, look up license numbers, read reviews, and ask for referrals to ensure you’re receiving quality service.
- Understand exactly how much you’ll be paying. Part of the allure of going solar is the potential savings. But it’s best to know for sure how much you’ll be saving. A legitimate solar lease or power purchase agreement should detail your exact pricing terms. For a lease, this should include what your flat monthly payment will be each month of your contract. A PPA should include your rate per kWh for your entire contract. Also, be sure that any extra charges are listed so you’re not caught off-guard in the future.
- Make sure the system is covered. Typically, in a solar lease or power purchase agreement contract, the solar company owns the system and should therefore be responsible for maintaining it and making sure it’s running properly. Triple-check that your contract details the terms of maintenance and repairs. Some companies also cover potential damage to your roof during installation and removal costs.
- Know your options if you have to move. Considering how long a solar contract is, it would be best to know what happens if you have to move to a new home. Most companies offer a contract that is transferable to the next homeowner. Relocating your solar power system may also be an option.