PPA

Power Purchase Agreement (PPA)

How Does it Work?

The Power Purchase Agreement is an option with no ownership involved for the customer. They will be able to have a PV system installed at no upfront cost to them. The finance company will lock the homeowner in for a set kwh rate for all of their electricity that is generated by the PV system. With this program, as long as the PPA rate is lower than the rate they currently pay with the utility, they will always save money. The rate will have options for an annual escalator increase of 0% - 2.9%. The warranties and maintenance are fully backed by the finance company.

Kwh .15 cent, with annual increase of 2.9%

Who Owns the System?

With the PPA, the Finance Company maintains ownership of the system throughout the term. This means they are also responsible

for keeping the system working to its fullest ability. Finance

Company will be the one eligible to claim the tax credit on the system.

What Does it Take to Qualify?

The homeowner must be on the title of the home, have a 650 credit score and no prior bankruptcies in the past 7 years on their credit report. The homeowner must see year-one savings to qualify.

How Does the Billing Work?

Each month, the homeowner will pay for the power produced by the system - not how much power is consumeThe d. Finance Company will charge the homeowner a fixed kilowatt per hour rate for all of the power produced by the system. Each year this kilowatt hour rate will increase by 0% - 2.9%.

How to Determine the Savings?

The simplest way to determine savings is by calculating what a homeowner is currently paying for each kilowatt hour (kwh). This can be done by dividing the “current electric charges” on the homeowner’s utility bill by the number of kilowatt hours used that month. ie: $250.00 current charges / 963 kwh = 25.9¢ per kwh. Next, compare this number with the rate for the solar power to determine what they would have paid with solar. For this example let's use the number 18.9¢

18.9¢ X 963 kwh = $182.

$250 - $182 = $68 in savings.

PPA rate offerings will vary depending on the cost of the utility.

What are the Positives?

- Good option for those unable to claim any tax credit and the finance company handles the tax credit.

- The homeowner can switch to cheaper clean power for no upfront cost and no liability besides simply paying the bill.

- Instead of taking on debt to their credit report, a homeowner can get a PPA with just the one initial credit check.

- The system is fully maintained and monitored by the finance company, so if anything goes wrong with the system the finance company is responsible to fix it at no cost to the homeowners.

- The homeowner only pays for energy that is generated from

the system and if no power is generated, the homeowner doesn’t have to pay anything for the system during that time.

What are the Negatives?

- The homeowner doesn’t get to own the system and add equity to their home.

- Since they will not own it, no tax credit is available for them.

- Although the agreement is completely transferable in a home sale,

the homeowner does not get to add the value of the system to

their home since it isn’t their asset. - Unfavorable buyout options.

What Kind of Customer Should Choose This Product?

Anyone who can’t redeem the tax credit from the government. Also, while a homeowner will own their home, they may lease their cars and choose the option that doesn’t impact their debt report. Additionally, some homeowners simply never do financing nor will want to shell out the cash, so this would be a perfect option for them.