Written by Kristina Zagame
Kristina Zagame, Solar Expert Article authorKristina Zagame is a journalist, editor and content writer with expertise in solar and other energy-related topics. Before joining EcoWatch, Kristina was a TV news reporter and producer, covering a wide variety of topics including West Coast wildfires and hurricane relief efforts. Kristina’s reporting has taken her all over the U.S., as well as to Puerto Rico and Chile. Learn More About This Person
Reviewed by Karsten Neumeister
Karsten Neumeister Expert reviewerKarsten is an editor and energy specialist focused on environmental, social and cultural development. His work has been shared by sources including NPR, the World Economic Forum, Marketwatch and the SEIA, and he is certified in ESG with the CFA Institute. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace. Learn More About This Person
Updated as of December 12, 2023
Why You Can Trust EcoWatch" />
Why You Can Trust EcoWatch
We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other solar site has covered renewable energy as long as EcoWatch, which means we have more data and insider information than other sites.
Jump to Section:
Find the best price from solar installers in your area.
Note: In July 2024, SunPower notified dealers it would be halting all new shipments and project installations. The company also noted it would “no longer be supporting new Leases and PPA sales nor new project installations of these financing options.”
While loans and leases are pretty common with big purchases like cars, you may not know much about a third common solar financing option — power purchase agreements, or PPAs. A solar PPA is one way to lease solar panels.
Instead of leasing solar equipment in your name, you allow for either a third-party solar developer or in some cases solar companies to place their equipment on your roof at no cost to you. In exchange the solar developer (who owns the equipment) receives the tax breaks and a new energy client (that’s you). As the owner of the roof that the equipment gets placed on, you can expect to receive reduced energy costs, often time at a fixed-rate and lower than market price in your area. Making this a desirable deal for both the solar energy supplier and you.
A PPA is a popular financing option for solar energy because it allows the homeowner to use solar energy without paying the hefty up-front cost of going solar. But don’t be fooled by a “free solar panel” gimmick — solar PPAs aren’t free, and they have their disadvantages. In this article, we’ll dive into the pros and cons of solar PPAs. But first, let’s review some logistics.
Best Solar Financing
Why we chose Blue Raven SolarSunPower designs and installs industry-leading residential solar and storage solutions across all 50 states. With a storied history of innovation dating back to 1985, no other company on this list can match SunPower’s experience and expertise.
SunPower earns its position as the top national installer on our list for a handful of reasons: It installs the most efficient solar technology on the residential market, offers the most expansive service area and backs its installations with a warranty well above the industry standard. All the while, SunPower pioneers sustainability efforts within the industry.
If that weren’t enough, SunPower systems come packaged with products all manufactured in-house by its sister company, Maxeon. This means that your panels, solar cells, inverters, battery and EV chargers are designed to work together and are all covered under the same warranty.
SunPower’s biggest downside? Its high-efficiency panels are considerably more expensive than most of its competitors’ products. However, its powerful panels are workhorses that make up for the initial cost with more backend production (think about this like spending more money for a car that gets more miles per gallon).
Best Solar Financing
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Year Founded |
| Average Cost ($-$$$$$) |
| Solar Services |
| Brands of Solar Equipment Offered |
| Warranty Coverage |
| 4.5 |
| A+ |
| 2014 |
| $$ |
| Solar Panels, System Monitoring |
| Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower |
| 25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee |
Best Solar Financing
Why we chose Blue Raven SolarWe like Blue Raven Solar because it understands that, for most homeowners, the cost of solar presents the biggest barrier to entry.
For that reason, Blue Raven Solar developed an innovative solar financing plan that offers in-house, flexible, zero-money-down options. The results speak for themselves, as Blue Raven Solar is now one of the fastest-growing solar companies in the nation and was recently acquired by SunPower. Its BluePower Plus+ plan (exclusive to Blue Raven) mimics the flexible structure of a lease while still providing the greatest benefits of owning your system.
Eligible homeowners enjoy 18 months of solar power before having to pay their first bill. When coupled with the federal solar investment tax credit (ITC), the initial energy savings can offset more than a third of the overall cost of a system before requiring a dollar down.
In contrast, other installers can only offer similar financing through solar leases, PPAs or third-party providers (such as Mosaic or Sunlight). Third-party loan providers can complicate the process, while opting for a loan or PPA will disqualify you from some of solar’s biggest benefits (additional property value, federal solar tax credit and local solar incentives).
Best Solar Financing
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Year Founded |
| Average Cost ($-$$$$$) |
| Solar Services |
| Brands of Solar Equipment Offered |
| Warranty Coverage |
| 4.5 |
| A+ |
| 2014 |
| $$ |
| Solar Panels, System Monitoring |
| Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower |
| 25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee |
Best Solar Financing
Why we chose Blue Raven SolarADT Solar sets the industry standard for warranty coverage by including a multifaceted guarantee, making it one of the top installers for homeowners who want added peace of mind.
Its warranty coverage includes all of the following for 25 years:
Though in recent years other solar companies have started to offer similar guarantees, ADT Solar has been at it since 2008, performing over 30,000 installations across the country.
Best Solar Financing
| EcoWatch Rating |
|---|
| Better Business Bureau (BBB) Rating |
| Year Founded |
| Average Cost ($-$$$$$) |
| Solar Services |
| Brands of Solar Equipment Offered |
| Warranty Coverage |
| 4.5 |
| A+ |
| 2014 |
| $$ |
| Solar Panels, System Monitoring |
| Trina Solar, Canadian Solar, SolarEdge, Silfab, SunPower |
| 25-year manufacturer warranty; 10-year workmanship warranty, 2-year production guarantee |
When a homeowner signs a solar power purchase agreement, they’re signing a contract with a solar company or a third-party owner who will take care of all the steps involved in putting the solar photovoltaic (PV) system on the home. That includes design, installation and necessary permitting.
In return, the homeowner — also called the host customer — pays the solar panel owner for the energy produced by the solar panel system installed on their house. The energy is typically sold at a fixed rate that’s lower than the local utility’s electricity rate.
Below is a diagram showing how it works between the utility, the homeowner/host, and the PV system owner/developer.
If your solar panels produce more energy than your home needs at any given time, the extra kilowatt-hours (kWhs) will be sent to the utility grid if net metering is available. You’ll receive energy credits for those kilowatt-hours that can offset (or potentially eliminate) any electricity charges you have (for example for electricity from the utility used at night when your solar panels aren’t producing energy).
Even if you eliminate your monthly utility bill by going solar, remember you’ll still have a separate monthly electricity bill from the owner of the solar energy system. You’ll send a monthly payment off to the solar panel owner for each kilowatt-hour of solar energy you used. If your home uses more energy than your solar panels produce, then you’ll have two bills — one from your utility company and the other from the owner of your PPA.
A solar PPA term typically ranges from five to 25 years. At the end of the term, you’ll have the option to renew the agreement, have the solar system removed or purchase your solar panel system from the owner at fair market value. 1
Best Solar Financing National Coverage Manufactures Original Panels A+ BBB Accreditation
However, you’re going to see the lowest amount of lifetime savings with solar leasing compared to buying your solar panels with cash or with a solar loan.
Say you’re a homeowner in Vermont considering solar panel costs where electricity is roughly $0.20 cents per kWh. You enter into a PPA contract with a solar company that charges $0.15 per kWh of solar electricity used. To keep numbers simple, let’s say you used 1,000 kWh of electricity and your solar panel system produced 1,000 kWh of electricity in one month.
In this perfect scenario, the amount of electricity you created and consumed would cancel out, which means you’ve eliminated the $200 energy bill you would have owed your utility if you didn’t produce your own electricity. While that sounds nice, don’t forget you still owe the solar company $150 for the 1,000 kWh of solar energy you used from the solar panels.
In this example, you would end up saving $50 per month with a solar PPA, or $600 per year. That’s not bad, and it’s certainly a bigger savings than not going solar. But if you owned your solar panels you likely would have saved a lot more.
Best Solar Financing National Coverage Manufactures Original Panels A+ BBB AccreditationWhile a solar PPA is a type of solar lease, there’s a difference between the two. With a standard solar lease, you make fixed monthly payments for access to the solar equipment — you can think of it as monthly rent for your solar panel system. Since you would be renting the equipment you would technically own the energy it produces. On the other hand, with a PPA, you’re not paying for the equipment but rather for the solar energy produced by the panels. In many ways, solar leasing presents a competitive option compared with a PPA. The amount customers pay for a solar lease is determined based on the capacity of the panels, while solar PPAs are paid based on the actual generation and usage. The difference means that those with solar leases will have a more fixed price that won’t fluctuate with your energy usage. That’s good news during high-energy months, like summer when your AC is cranked on high. But you could pay more with a standard solar lease during months of low energy usage. Solar leases and PPAs are not offered by all solar companies but are common through national solar companies like Sunrun.
Although a great option for sustainability and energy savings, the decision to go solar comes with many pros and cons, as does each solar financing option. If you’re considering signing a solar PPA, here are a few advantages and disadvantages to keep in mind:
While there are several pros, the cons of solar PPA weigh a lot heavier in our opinion. Although you’re saving up front, the cost benefits of going solar are significantly reduced when you don’t own your solar panel system.
The average U.S. solar panel system costs roughly $29,970 before applying any tax credits, so it’s understandable that most homeowners cannot shell out that kind of cash up front. But that doesn’t mean solar leases or PPAs are your only option.
Most of the top solar companies provide plenty of options to finance a solar panel system that you can actually own, or you can look into getting a loan from a government program or your bank.
Ultimately, the way you decide to utilize solar energy is entirely up to you. We typically recommend that homeowners buy their solar panels outright to maximize all of the financial benefits of going solar. But we also recognize this isn’t a realistic option for everybody.
A solar lease or PPA is a good option for homeowners who aren’t in a good position to purchase their own system (whether financially or otherwise), are ineligible for solar tax credits or simply don’t want to deal with system maintenance.
One word of caution: Those advertisements for “free solar panels” are misleading. It’s unlikely that solar panels will ever be free, but you can install solar panels on your home with a $0-down financing option through a solar PPA, lease or solar loan.
If you want to know for sure how many panels you need, you can click below to connect with an EcoWatch-vetted installer and get a free estimate.
Best Solar Financing National Coverage Manufactures Original Panels A+ BBB AccreditationThe cost information presented in this article is derived from a comprehensive analysis, incorporating data from multiple industry sources. The average cost per watt per state was calculated based on figures from Consumer Affairs, Energy Sage, and Berkeley Lab’s Electricity Markets & Policy Department. Additionally, monthly energy consumption and the average monthly cost of electricity were sourced from the U.S. Energy Information Administration, ensuring a well-rounded and accurate representation of the information presented.
A PPA, or power purchase agreement, is a way to use solar energy without having to pay for a solar panel system. With a PPA, you essentially borrow solar panel equipment and pay directly for the electricity it produces each month.
A solar PPA is a type of solar lease, but they’re not the same. With a solar lease, you pay a fixed monthly payment for access to solar equipment. With a PPA, you’re not paying for the equipment, but rather for the solar energy produced by the panels — similar to how you’re currently paying for electricity from your utility provider.
If you want to get the maximum financial benefit from your solar panels, you should buy them outright. However, a solar PPA may be worth it for homeowners who aren’t able to purchase their own solar panel system or those who are ineligible to receive solar tax credits.
The benefits of choosing a solar PPA are: no upfront cost of a solar panel system, reduced energy costs and no equipment maintenance. In theory, you get to reap many benefits of going solar without having to deal with the costs or headaches associated with owning your solar panel system.
Kristina Zagame is a journalist, editor and content writer with expertise in solar and other energy-related topics. Before joining EcoWatch, Kristina was a TV news reporter and producer, covering a wide variety of topics including West Coast wildfires and hurricane relief efforts. Kristina’s reporting has taken her all over the U.S., as well as to Puerto Rico and Chile.
Karsten is an editor and energy specialist focused on environmental, social and cultural development. His work has been shared by sources including NPR, the World Economic Forum, Marketwatch and the SEIA, and he is certified in ESG with the CFA Institute. Before joining EcoWatch, Karsten worked in the solar energy sector, studying energy policy, climate tech and environmental education. A lover of music and the outdoors, Karsten might be found rock climbing, canoeing or writing songs when away from the workplace.
