Most of these terms can typically be negotiated. This list will include a sample of the different terms to consider.

Term: How many years are you going to be locked into the agreement? Terms typically range from 15-20 years. Think about it, the entity that is making the upfront investment needs to know they are going to get paid for a long enough period of time to make a profit so longer terms are often necessary.

PPA Rate: What is the rate per kwh going to be? Rates are typically less than what you would otherwise pay your electric company. Also, will you pay monthly, quarterly, or annually?

Rate Escalator: Almost all PPA’s include rate escalators that average 1-2% per year. Solar system owners like to see annual escaltors in order to keep up with inflation. 1-2% increase per year is not too bad when you compare that to the average 5% annual increase we have seen over the past 10 years.

Assignability: What if you move, can you assign the PPA to someone else?

Taxes and Insurance: Will the PPA provider cover any additional property taxes and insurance costs? Typically, PPA system owners will want to make sure the system is properly insured so they will pay for that However, property tax increases, if any, need to be negotiated.

Repairs & Maintenance: What if a vicious tornado or storm damages the panels? Typically the solar system owner will be responsible for all maintenance and repairs but you will want to make sure.

Termination: When does the contract end and do you have a right to purchase the system or extend the term? What if you want to buy the system earlier in the term?