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Cash Poor Financing: PPAs

For those of you catching up:

  • Richard wants solar for his family, but doesn’t have the upfront cash or home equity to finance $10 to $15,000 worth of solar panels.
  • I told him about no money down leasing options, such as the one offered through Solar City.

Another similar option to leasing is what’s called a Power Purchase Agreement or “PPA.” These are usually better for large factories and businesses, but there is at least one residential company doing PPA’s called SunRun Solar.

PPA agreemens can be variable, so you may want to compare providers. That being said, here are the basics:

  • PPAs give you your solar panels for little or no money down, depending on the system size that you need. SunRun says it can be low as $1,000 down. Some systems could be more, however…. More like 2 to $3,000, fyi.
  • The PPA company actually owns the panels. You pay for the power that the solar panels generate. So, it’s sort of like your new electric utility, only here it’s clean power.


  • You get locked into a set electric rate (with periodic rate increases). that is hedged againt the rising cost of electricity. So, you’re getting power at a green discount.
  • The PPA pays and takes care of maintenance (It’s not that much except for around year 12 when they have to replace your inverter. Otherwise, need to keep it clean.).
  • You’re still tied to the grid, so even if the system breaks down, you’ve got electricity.
  • There’s typically some option to buy.


  • There’s that grand or two or three upfront cost.
  • You’re locked in to this thing for 15 or 20 years. (SunRun is 18.)
  • If you move, you’ve got to take the panels and the agreement with you or transfer it to the new home owner.
  • You’re financially MUCH better off in the long run by buying, not through the PPA or leasing. That said, you’re getting solar power for just a little down with better rates than you get from your coal utility.

As always, Richard, best to shop around. In Part 3, I’ll tell you about another no money down option that’s probably the best deal.

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