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Solar leases vs. Solar PPAs

Written by Faith Foushee/

Edited by Hannah Hillson

Last updated 04/10/2023

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Key Points

  • Solar leases and power purchase agreements (PPA) are two payment options with minimal upfront costs.
  • The main difference between a solar lease and PPA is under a solar lease, you pay a fixed monthly rate, no matter how much energy is generated or consumed

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Frequently asked questions

  • The main difference between solar leases and PPAs is what you pay. In a solar lease, you pay a fixed monthly rate for the use of the solar panels. In a solar PPA, you pay a fixed rate per kWh of energy consumed from the solar panels. 

  • No. Solar leases and PPAs are not eligible for solar tax incentives or rebates because you are not the owner. Instead, the solar company will benefit from incentives. 

  • A cash purchase and solar loan are two financing, incentive-eligible options. Community solar is another option if you cannot install solar panels on your home.

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