Path-Q Solar
What PPA contract terms can make the total solar cost difficult to predict?
Answer
The main sources of uncertainty are escalating energy prices, minimum or fixed payments, unclear production measurement, long terms, uncertain utility savings, and costly transfer, buyout, or termination provisions. The total cost should be calculated from the actual contract rather than the initial advertised rate.
Key points
- An escalator can increase the PPA price even if utility rates do not rise as expected.
- Minimum charges can keep payments from falling in low-production periods.
- Transfer, removal, roof-work, insurance, and end-of-term provisions can create costs outside the regular payment.
What it depends on
- PPA price, escalator, term, minimums, and fixed charges
- Production measurement and performance remedies
- Buyout, early termination, transfer, removal, and roof-access terms
- Utility rates and export treatment
Risks and trade-offs
- A low starting price may not represent the average price over the contract term.
- Long contracts can expose the homeowner to changing usage, roof needs, and resale conditions.
- Unclear responsibility for repairs or underproduction can create disputes and unexpected costs.
Information you may need
- Complete PPA agreement and all exhibits
- Payment schedule showing escalations and minimums
- Buyout, transfer, termination, roof, insurance, and performance provisions
Your next step
What to do next
Calculate the scheduled payment under the full term and ask the provider to explain every condition that can change the payment or create a separate charge.
Path-Q
Find the right next step
Answer a few questions and we’ll narrow your options.
Loading…
SQ00729