Path-Q Solar
Is a PPA suitable if my electricity use may change substantially?
Answer
A PPA may be less suitable when electricity use is likely to change substantially unless the contract remains economical at the new usage level and clearly addresses production, excess generation, and transfer or termination. Evaluate the agreement using both higher- and lower-consumption scenarios.
Key points
- Lower usage may reduce the value of generated electricity while PPA obligations continue.
- Higher usage may increase the value of solar but may also leave the household buying substantial grid power.
- Changes from electrification, occupancy, efficiency upgrades, or battery use should be modeled.
- Check whether the PPA payment is tied to production rather than the amount of electricity actually consumed.
What it depends on
- Expected future consumption
- PPA price, escalation, and term
- System production and export treatment
- Remaining utility charges
- Buyout, transfer, and termination provisions
- Likelihood and timing of household changes
Risks and trade-offs
- A long contract can outlast the assumptions used to size the system.
- Excess production may have lower value than on-site consumption.
- A PPA can be difficult or costly to exit if the property is sold or usage changes.
Information you may need
- Current and forecast electricity use
- Planned electric appliances or efficiency projects
- Complete PPA payment and exit terms
- Expected production and export assumptions
Your next step
What to do next
Model the PPA under low, current, and high consumption scenarios and verify how each scenario affects bills and contractual obligations.
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