A solar power purchase provides the property owner with cost-effective financing for a solar system. In a solar power purchase agreement, the contractor agrees to build a solar system and the property owner agrees to buy electricity from the solar system at a set rate.
Until recently, this type of agreement only happen for large, commercial solar systems. Since the property owner still pays electricity monthly, it is easy to determine the cost-effectiveness of a PPA. If the electriicty cost will be less, why not go with solar?
Now, companies have brought this model to smaller residential solar installations. Homeowners do not have to pay for the solar system up-front. Instead, they agree to pay a set rate on solar generated electricity. Typically, the homeowner has the option to purchase the solar system after a set amount of time.
This also saves the homeowner from maintaining the solar system and monitoring system performance (since it is in the contractor's best interest to make certain the system performs optimally).
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