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SunRun Solar PPA Example

Avatar for Dave Llorens
Published on 06/15/2009 in
Updated 12/28/2018

In my last post about SunRun, we talked about the basic outline of the SunRun solar PPA. In this post, we’re going to go through an example of an average system in Southern California Edison (SCE) utility with tiered rates and net metering. The example would be similar in other SunRun territories, but not Arizona and Los Angeles, which are leases.

In this example:

  • The customer’s average monthly electric bill is $153/month.
  • This corresponds to $.21/kWh average rate across the rate tiers.
  • The solar system’s size is 5 kW DC, or 4.23kW AC.
  • This system’s size (5 KW) will offset 87% of the home’s expected electric bill over a year. So you’ll still have to pay the utility 13% of your power needs for the next 18 to 25 years.
  • In the example, SunRun projects electric rates in SCE territory to rise an average of 6.5% annually across higher rate tier customers. I think that’s a good estimate. Recently, in April of 2009, energy hungry SCE customers saw a rate increase from 3% to 10%, depending on which rate tier. Historically, electric rates have risen an average of 5% nationally over the last few years, but due to new clean energy requirements and carbon cap and trade legislation in Congress, experts believe utility rates will increase faster than they have in the past, especially for big energy users who are pushed into the high rate tiers. Your state/utility will have different projected increases.
  • This 6.5% projection means that the current .21 kWh average rate for this customer will be $.56/kwh by the end of the 18 year contract.


  • To lock in your $.21/kWh bill for 87% of your electric bill for the next 18 years (assuming your power needs remain the same), the customer pays $3752 upfront.
  • For a small fee, you can spread this upfront payment over the first year and pay $237 a month plus the $133/month for solar, and $20/month for the left over utility bill.
  • Assuming that 6.5% rate increase over the 18 years of the contract, you’ll start to see more and more savings every year. For example:
  • After 5 years, you’ll be saving almost $500 a year in electricity costs. Your combined SunRun bill and utility bill will be $155.66/month. Without SunRun, you would have been paying almost $196.66/a month.
  • By the end of the 18 year contract, in today’s dollars, you’ll have saved $9,253.
  • You can purchase the system at year 18 for $5000 or continue the contract at a rate of 10% less than the utility rate at that time.
  • By the 25th year, if you’ve purchased the system, you’ll be paying zero to SunRun and only $89.25/month to the utility. If you only had stayed with the utility, your bill would be $692.83/month.
  • All installation costs, and inverter replacement and full maintenance is included. (Expect excellent maintenance from SunRun. They want to make sure your panels are properly maintained and working because their fee is based on how much electricity the panels generate. So, if something goes wrong with your solar system, you’ll probably get a quick visit from the SunRun installer to make sure you’re getting full power out of your solar panels.

SunRun notes that the above sample quote is for a home with good solar potential. Check my previous post about gauging whether your home is right for solar.

In my next post, I’ll talk about the new Los Angeles and Arizona lease model and give an example.

Last modified: December 28, 2018

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bart zandenAjanbartTor a.k.a. "Solar Fred"Jim Recent comment authors
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bart zanden
bart zanden

Hi Fred,

Great blog. I am having difficulty coming up with the figures, can you help me with that?




This 6.5% projection means that the current .21 kWh average rate for this customer will be $.56/kwh by the end of the 18 year contract.

a 6.5% projection means that the current .21 kWh average rate will be 0.65 kwh by the end of the 18 years.




I don’t quite understand. Sunrun installs solar panels and I still need to pay the remaining 13% of the utility bill?

Why not just install 100% solar panel and to the utility?


I’m an Hawaii resident considering SunRun under a PPA. My situation is Social Security + some consulting work, but modest annual direct income, so the federal tax credit will take a few years to pay off if I were to buy my own system. I have available cash, so I’m looking at an option that pays SunRun $11K up front for the following scenario: Site Assumptions Utility: HELCO Current monthly HELCO bill: $236 Annual electricity usage: 7,150 kWh Your System SunRun Total Solar always includes 20 years of repairs, maintenance, insurance, and monitoring and a money-back performance guarantee Value of… Read more »

James Goodfelllow
James Goodfelllow

I’m seriously looking at the Up front whole tab because I am getting immediate rebate and tax credit plus an additional 10% plus new breaker panel and want someone to monitor, maintain, and replace the inverter over time. I’m retired and over the coming years know I can’t be in a position to manage those things. However, I have the following concerns; a) What if SunRun no longer gets the current incentives and decides to walk away from the business or worse fails finacially, Who will assume the responsibilities and how much effort is there to force compliance with the… Read more »


What about the option when you pay the whole “tab” upfront with Sun Run. I know you don’t own the system, but you do not pay monthly to Sun Run and you get advantage of the maintenance and warranty repairs if needed.

Tor a.k.a. "Solar Fred"
Tor a.k.a. "Solar Fred"

Hey, Bob. There’s little advantage to the pay up front option. If you do that, you might as well buy your system upfront yourself and buy a maintenance contract from an installer. The truth is that there’s very little maintenance with a PV system. You’ll have to replace the inverter(s) and that could cost 2 grand or less, but in 10 years, might even be less with competition and innovation. Panels have to be hosed or wiped down for dust every once in a while. Otherwise, no real worries, assuming you got a good install and your roof was in… Read more »


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