Solar Third-Party Power System

What is third-party ownership of solar energy?

Third-party ownership of solar energy refers to two primary models: solar leases and power purchase agreements (PPAs). In both cases, your electricity bill is offset by the solar system’s energy production. A solar lease is where the customer signs a traditional lease for the solar equipment installed on your roof.

What is third-party solar financing?

Check your browser's developer console for more details. Third-party financing is a well-established financing solution in the United States, having emerged in the solar industry as one of the most popular methods of solar financing. Third-party solar financing predominantly occurs in two forms: solar leases and power purchase agreements (PPAs).

What is third-party Ownership (TPO)?

Third-party ownership (TPO) is exactly as it sounds in which a system is owned, installed and maintained by a third-party. In this ownership model, homeowners enter into a power purchasing agreement (PPA) or may choose to lease the equipment from the third party. TPO currently accounts for roughly ⅔ of all residential systems installed.

Who owns a solar system?

The majority of residential solar installations in the US fall into two buckets, direct and third-party ownership. A PV system is considered direct ownership if the homeowner owns the equipment outright and finances the purchase using their own savings or a loan.

Which states authorize third-party PPAs for solar PV?

This map of the United States shows which states and territories authorize the third-party PPAs for solar PV, which includes at least 28 states (plus Washington, D.C., and Puerto Rico). This map and information are provided as a public service and do not constitute legal advice.

What is the difference between a PPA and a TPO Solar System?

Under the PPA arrangement the system is installed at no cost to the homeowner, while the PPA locks in an electricity rate (typically lower than the utility) with the third-party to ensure a predictable rate structure. By comparison, leasing a solar system under a TPO arrangement offers a similar experience to leasing a car.