A solar power purchase agreement lets you use rooftop solar without buying the system. You pay for the electricity it produces, and the installer owns and maintains it.
Utility bills keep climbing, and buying a solar system takes a large amount of cash or a loan. A solar PPA is a third path. A solar company installs a system on your roof at its own cost, then sells you the power it produces at a per kWh rate. You pay for electricity, not equipment. See how it compares with a solar lease or a solar loan.
Most PPA terms run 20 to 25 years. The rate is set in your agreement, often with a yearly increase called an escalator, so compare the starting rate, the escalator and your current utility rate before you sign. If you would rather pay once instead of monthly, read about a prepaid PPA.
A PPA tends to fit homeowners who want a lower electric bill, do not want to spend much upfront and are comfortable with a long agreement. It may not fit if you plan to sell soon, want to own the system or want to keep every incentive yourself. Whether it saves money depends on your utility rate, the PPA rate and how quickly that rate rises.
We compare each PPA rate and yearly increase with your current utility rate.
We explain the term, the escalator, the buyout and what happens if you sell, in plain language.
See real numbers first, with no obligation. Questions? Talk to our team.
How It Works
Here is the usual path from signing to switching on, so nothing about the agreement is a surprise.
See how a solar lease differs, or request a quote to see PPA offers for your address.
Pros And Cons
A PPA is not right for everyone. Here is the honest picture.
Prefer to own your system? Compare a solar loan or a cash purchase.
Compare The Numbers
The rate on its own tells you very little. Use these three steps.
We run this comparison for your home when you get your solar quote.
Another Way To Pay
A prepaid PPA covers the power your system will make for the term in one upfront payment, so there is no monthly solar bill.
Homeowners who have cash, want a long term price for their power and would rather not take on a loan. The installer still owns and maintains the system.
The upfront price against the total of monthly PPA payments, the term, what happens if you sell and whether a loan or cash purchase fits better. Read the full prepaid PPA guide.
A fixed monthly payment to use a solar system, with the installer owning and maintaining it.
Pay for the power your system will make in one upfront payment instead of a monthly bill.
A solar power purchase agreement, or PPA, lets you use rooftop solar without buying the system. A solar company installs and owns the panels on your roof, and you pay a set rate for each kilowatt hour (kWh) they produce. You pay for electricity, not equipment. Collective Power compares solar PPA offers with lease, loan and cash options, and you can read about our other solar financing options.
The installer designs and installs the system, then bills you each month for the power it produced at the rate in your agreement. Your utility bill drops by the amount of power the panels cover, and you still pay the utility for any power you use beyond that and for its fixed charges. A solar lease works differently because you pay a fixed amount no matter how much the system produces. Request your solar quote to see both side by side.
There is no single typical rate. PPA rates vary by installer, state, utility, system size and how fast the rate rises each year, so the only useful number is the one quoted for your address. What matters is how the starting rate and the yearly increase compare with what you pay your utility now. See how rates differ across California and Massachusetts, or get a quote for your home.
The pros often include little or no money down, no equipment to maintain and a rate you can compare with your utility rate. The cons include a long agreement, usually 20 to 25 years, a rate that may rise every year, and no ownership of the system, so you do not claim ownership incentives. If you would rather own the system, compare a solar loan or a cash purchase.
It can be, if the PPA rate and its yearly increase stay below what your utility is likely to charge over the term. It is less likely to be worth it if your usage is low, your roof has shade, or you plan to sell soon. We compare your PPA offers with your utility rate for you. Start with your California or Massachusetts options, or ask our team.
Often, yes. Many agreements include an escalator, a set percentage the rate rises each year, and some offers keep the rate flat. A lower starting rate with a high escalator can cost more over time than a slightly higher flat rate, so always compare the full term. Our services page shows how the options differ, and a solar lease has its own escalator to check.
Usually one of three things: the buyer takes over the agreement, you buy out the system, or the installer helps you transfer it. Buyers and their lenders will want to review the contract, so ask about the transfer process and any fees before you sign. A cash purchase avoids a transfer because the buyer simply gets a home with panels. Contact us with questions about your situation.
Find your utility's price per kWh on your bill, then ask for the PPA's starting rate and its yearly increase. Compare the two over the full term, not just the first year. In California that also means looking at time of use pricing, and in Massachusetts at your Eversource, National Grid or Unitil rate. We build that comparison for you when you request a quote.
Yes. With a PPA you pay for the electricity the system produces, so your payment moves with production. With a solar lease you pay a fixed monthly amount to use the system. In both cases the installer owns and maintains it. Read the side by side comparison to see which fits your home.
The installer or its financing partner owns the system and is responsible for repairs and monitoring, and many agreements include a production guarantee. Read the maintenance and warranty sections of your contract so you know who to call. Learn more about how we vet installer partners or talk to our team.
Solar PPAs are common in California. In Massachusetts, whether a PPA is available depends on your address, utility and installer partner, so we confirm what applies before you spend time on a quote. See our California solar page, our Massachusetts solar page or all areas we serve.
A prepaid PPA is a power purchase agreement where you pay for the system's electricity upfront in one payment instead of paying a monthly bill. The installer still owns and maintains the system. It suits homeowners who have cash and want a long term price for their power without taking on a loan. Compare it with a standard solar PPA and your loan options.
Next Step
Share your address and a recent electric bill. We compare PPA offers with your other options and show you the numbers, with no obligation.
Read about prepaid PPA, solar lease, solar loan or cash purchase options, browse California and Massachusetts, or contact us.