Path-Q Solar

What risks should I consider before signing a solar power purchase agreement?

Answer

Review the PPA's long-term price, escalation, production and billing rules, maintenance obligations, transfer requirements, buyout terms, and consequences of moving, refinancing, or replacing the roof. The most important risk is accepting a long contract whose future cost or exit conditions are unclear.

Key points

  • Confirm who owns the equipment and who is responsible for repairs, insurance, monitoring, and damage.
  • Understand whether payments depend on actual production and how disputes are handled.
  • Review what happens if production is lower than forecast or the system is unavailable.
  • Check sale, transfer, buyout, removal, and roof-replacement provisions.
  • Compare the PPA with cash purchase, loan, and lease options using total net cost.

What it depends on

  • PPA price and escalation
  • Production and billing provisions
  • Contract term
  • Maintenance, insurance, and performance obligations
  • Transfer, buyout, and termination terms
  • Utility and property circumstances

Risks and trade-offs

  • Long-term obligations can limit flexibility if the homeowner moves or usage changes.
  • The provider's production forecast may not equal the homeowner's actual bill savings.
  • Contract terms may affect a sale, refinance, roof replacement, or insurance arrangement.

Information you may need

  • Complete PPA contract
  • Provider performance and maintenance commitments
  • Buyout, transfer, and termination calculations
  • Comparable ownership proposals

Your next step

What to do next

Have the full agreement reviewed for price escalation, exit, transfer, and roof-related clauses before signing.

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