Solar power purchase agreements
Short answer. Under a solar power purchase agreement, a developer owns the panels on your roof or a nearby site and sells you the electricity they produce at a contracted price. You do not own the system, so you generally do not claim the federal tax credit. You do accept a term that can run for many years. It is not a retail green-power plan and it is not community solar unless the contract is a subscription.
What to price
The price per kWh, the escalator, the term, and what happens if you sell the building. Who keeps the renewable certificates. Who pays for removal. What the production guarantee is, and what you are paid if the system underperforms. The utility still delivers the kWh the system does not cover, under net metering or a buyback.
Compare the PPA price with the retail rate you actually avoid, not with a national average. If the export credit is below retail, a PPA priced like a retail offset will disappoint.
Ownership is the point
A lease is a cousin: you pay for the equipment rather than for each kWh. A purchase means you own the output and the maintenance. Pick the structure on purpose. The tax-credit page explains why a 2026 buyer should not assume a personal 30 percent credit. In a PPA the owner, not the host, was always the party positioned to use a credit.
Business PPAs for off-site projects are a wholesale-linked contract. Do not use a rooftop-home explanation for a virtual PPA. The index-versus-fixed page is closer to that product.
Questions people ask
Can I cancel a PPA if I move?
Only under the assignment or buyout clause. Assume it is expensive until you read it.
Does a PPA replace my utility?
No. You still have a delivery utility and, at night, imported energy.
Is a PPA a green supply plan?
No. A supply plan matches certificates to grid power. A PPA is tied to a system’s output.
Use the bill, not a stale screenshot
Solar power purchase agreements comes down to documents you can keep: the utility name on the bill, the supply price or default price, the kWh or demand that drove the charges, and the term and fees in any contract. National average prices from the Energy Information Administration are context. For 2024, EIA put average residential use at 865 kWh a month and the average residential price at 16.5 cents per kWh. For June 2026, EIA reported 18.34 cents per kWh of residential revenue. Those figures mix supply and delivery for the whole country. They are not a price to compare, and they are not an offer in this territory.
If a salesperson’s number and the bill disagree, keep the bill. Shop Energy Prices does not rank suppliers and does not publish a live rate table. Re-check the official shopping site or the utility tariff on the day you enroll, because offers and default prices change.
Going further on Solar power purchase agreements
Solar power purchase agreements is a solar question, which means the valuable comparison is between imported kilowatt-hours and exported kilowatt-hours, not between two supplier logos.
The meter records imports when the building uses more than the array produces and exports when the array produces more than the building uses. A retail rate, a net-metering tariff, or a buyback credit applies to those two streams differently. Read the tariff for the export price, whether credits expire, and which charges still apply to imports.
Shade, tilt, azimuth, and inverter clipping change annual production more than a small difference in panel brand. A production estimate that ignores shade is not a savings estimate. Ask for the monthly production the installer used and compare it with a year of your actual imports.
Who owns the renewable attributes matters. If the contract transfers the certificates, you should not also claim that the same kilowatt-hours are green. If you keep them, say so in any corporate or personal claim.
Interconnection is a utility process. A retail electricity supplier in a choice market does not approve the interconnection, and a marketing claim about a federal tax credit does not change the utility’s study timeline.
Under IRS fact sheet FS-2025-05, the section 25D residential clean energy credit is not allowed for expenditures treated as made after December 31, 2025. A 30 percent figure belongs only to projects that qualified before that rule. Confirm the current IRS page before you subtract a credit from a quote.
What to verify before you act
Write down the utility name, the account name, the supply price or default price, and a typical month of use. Solar power purchase agreements does not change those four facts. If a contractor, a supplier, or a city page disagrees with the bill, the bill wins. Shop Energy Prices does not sell electricity and does not keep a live rate table.
Use one official source for the benchmark: the price to compare or default service on the bill, the state shopping site if your state publishes one, or the commission docket that sets the default. EIA’s national averages are context for scale. They are the wrong number to beat.
Keep the contract PDF. Circle the term, the fee to leave, the renewal rule, and any pass-through that is not fixed. A verbal match to a competitor is not the product. If you are inside a cancellation window, follow the written notice method the same day and keep a copy.
Re-read the contract or tariff section that mentions Solar power purchase agreements and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
Re-read the contract or tariff section that mentions Solar power purchase agreements and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
Re-read the contract or tariff section that mentions Solar power purchase agreements and copy the defined term into your notes. If the defined term does not match the way a salesperson used the words, the defined term controls. Ask the supplier or the utility, in writing, which line on the next bill will change and which lines will not.
A worksheet for Solar power purchase agreements
Write the utility, the rate class, the current supply or default price, the end date, and a recent month of kilowatt-hours. Beside them write the alternative and every fee. Solar power purchase agreements is finished only when those two columns can be subtracted. If you cannot name the fee to leave, you do not yet have a decision.
Ask, in writing, which bill lines change and which stay. Delivery, franchise fees, and gross-receipts taxes usually stay. Supply, a voluntary green attribute, or an equipment runtime can change. A seller who will not point at the line is not ready for your signature.
Set one reminder for 60 days before the contract ends and one for the day a commission usually resets default service, if you know that month. Solar power purchase agreements does not require weekly shopping. It requires one careful comparison at the moment the price can actually change.