When you decide to invest in a solar energy system, it’s best to determine early on how you’ll finance it. Your decision often boils down to choosing between a solar lease, solar power purchase agreement (PPA), and purchase. Of these three options, solar PPA vs. lease may be the most difficult since they are so similar to each other. Let’s look at how these two options differ while helping you finance your solar system.
Is a Power Purchase Agreement a Lease?
No. Both financing options involve you making monthly payments to your solar provider, but they are not the same thing. When you enter into a solar lease, you pay your provider to rent the entire solar panel system. When you use a solar PPA, you pay your provider to access the clean energy the solar system generates, not the system itself. If you want access to the entire solar system, choose a solar lease to finance your system. If you only want the system’s renewable energy, choose a solar PPA.
Choosing Between a Solar Lease or PPA and Purchasing Your System
How can you tell if you should purchase your solar energy system outright or finance it through a solar lease or PPA? Purchasing your solar system is usually the right decision if your organization has usable capital for the purchase and an available appetite for tax credits and incentives. If you don’t have those financial components in your organization, a lease or PPA agreement for your solar system is your best option.
Can You Use Tax Credits if You Finance Your System With a Solar PPA or Lease?
No, not directly. If you rent your system or purchase its energy from your solar provider, they receive all the solar financing incentives and tax credits your system is eligible to receive. Your provider uses those credits and incentives to build and maintain your solar panel system, but you don’t directly control which credits and incentives they apply for or how they use them. However, you can keep in touch with your solar provider and ask them about the incentives and tax credits they’re using.
What Benefits Do Solar PPAs and Leases Provide?
A solar PPA allows you to use solar energy to lower your electricity bills while keeping the system off your balance sheet. You use the system’s energy, but you don’t have to maintain it or keep track of its financing. Solar lease benefits are similar to PPA benefits, but you should keep track of your lease payments since you’re paying to use the system, not just its energy.
Why Partner With Verogy for Your PPA or Lease?
Verogy helps you navigate every step of the solar financing, development, and design processes. We help you choose the right financing option for your system and let you determine whether you want to own it outright, rent it from us, or purchase its energy from us. We put your solar needs and goals first to ensure your system provides the right amount of energy for your facility, campus, or community. Our solutions reduce your energy bills and save you money in the long run. When you partner with us, you gain a dedicated solar developer who creates a customized solar system to meet your short- and long-term solar needs.
Start Your Solar PPA or Lease With Verogy
Reach out to us today if you’re ready to begin purchasing solar energy or renting a solar energy system. We can walk you through all your solar financing options and help you select the right one for your organization. Don’t worry if you’re not ready to choose between the solar PPA and solar lease options right now. Once you partner with us, we help you through the solar process, so we’re ready to help you choose your financing options. If you have any questions about our solar services, check out our FAQ page and connect with us if you don’t see your question there. We’re here to support you as you transition to powering your facility, campus, or community with solar energy.
