Path-Q Solar
How does a power purchase agreement charge for the electricity my panels produce?
Answer
Under a power purchase agreement, the provider generally owns the system and charges for the electricity it produces at a contract price per unit, often with a specified escalation or adjustment. The homeowner may still receive a utility bill for electricity purchased from the grid and other charges.
Key points
- Review whether charges are based on measured production, a defined estimate, or another contractual method.
- Identify the starting energy price, escalation, contract term, and any minimum or supplemental charges.
- Compare the PPA price with the value of avoided utility purchases, not with total utility bills alone.
- Check who handles monitoring, repairs, insurance, underproduction, and equipment removal.
What it depends on
- Contract price per unit
- Escalation or adjustment formula
- Measured production and billing method
- Utility rates and export treatment
- Contract term and fees
- Maintenance and performance provisions
Risks and trade-offs
- Payment can vary with production, while the remaining utility bill can vary independently.
- Escalation may cause the PPA price to approach or exceed the value of displaced grid electricity.
- The agreement may create transfer or roof-work obligations.
Information you may need
- Full PPA price and escalation schedule
- Billing and production measurement provisions
- Expected residual utility bill
- Term, transfer, buyout, and removal clauses
Your next step
What to do next
Map the PPA charge, remaining utility bill, and expected solar production by year, then compare the result with ownership alternatives.
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