Each choice offers distinct benefits and responsibilities, from paying for the power generated (PPA) to paying a fixed monthly fee (Lease) or owning the system outright (Purchase). Below, we’ll break down each arrangement and how it impacts your monthly bills, property rights, and long-term costs.

1. Power Purchase Agreement (PPA)

• Pay per kilowatt: Pay the solar company a set amount for every kilowatt your solar system produces each month, leading to fluctuating bills.

• Ownership: Despite the word “purchase,” you are not purchasing the solar system—only the power it produces. You won’t own the system, but your PPA may include an option to buy it at fair market value after a set period.

• Contract Length: Most PPAs last 20–25 years.

• UCC-1 Lien: A UCC-1 lien is recorded with the Secretary of State, indicating that the solar company owns the system. It does not become a permanent fixture of your home.

• Responsibility for the System: The solar company is generally responsible for any repairs or issues not caused by you.

• Power Bills: You’ll usually still see a monthly power bill—potentially minimal if your system is functioning well. Gas usage often comprises the bulk of your bill, if applicable. Be wary of any solar company that promises no power bill at all.

• True-Up Bill: Expect an annual true-up bill in addition to monthly statements.

• Selling Your Property: If you’re still in a PPA when you sell your property, your typical options are:

  1. Buy the system

  2. Transfer the system to your new home

  3. Have the buyer assume the PPA

2. Lease

• Monthly Payment: Pay a fixed monthly fee to the solar company for using the panels. (Some leases can be prepaid but are less common.)

• Contract Length: Most leases last 20–25 years.

• Ownership: You do not own the solar system. However, the lease might give you the option to purchase it at fair market value later.

• UCC-1 Lien: A UCC-1 lien is recorded to show the company’s ownership. The system isn’t permanently attached to your home.

• Responsibility for the System: The solar company typically covers issues you didn’t cause.

• Power Bills: You’ll still receive a monthly power bill, though potentially smaller if the system is performing well. Again, be cautious of any guarantee of “no bill.”

• True-Up Bill: An annual true-up bill is generally expected alongside monthly invoices.

• Selling Your Property: Similar to a PPA, if you sell your home mid-lease, your usual options are:

  1. Buy the system

  2. Transfer it to your new home

  3. Have the buyer assume the lease

3. Purchase

• Ownership: You own the system outright.

• Responsibility for the System: If something goes wrong and it isn’t covered by warranty, you’re responsible for repairs.

• Financing: Many homeowners finance their purchase; some pay in cash. If financed, a UCC-1 lien is recorded until the system is paid off.

• Power Bills: You’ll likely still receive a monthly bill, usually minimal if the system is functioning optimally. Gas usage often remains the larger portion of your bill.

• True-Up Bill: Expect an annual true-up, in addition to monthly statements.