Is a PPA the Right Option for Your Family?
Let's dig in and find out.
by Derick Cohen
5 min read - Published on 05/10/2022
With all the financing options available right now, switching to solar has never been easier on your pocketbook. And finding the right financing option for you can give you the boost you need to make the switch to solar.
In some states Lumio offers Power Purchase Agreements (PPAs) which are a popular financing option for people looking to install solar on their homes without putting any money down, incurring any debt, or paying for their entire solar power system up front with cash. This form of financing has been around for over 15 years, and it’s one of the easiest ways for a homeowner to save money and go green with Lumio.
What exactly is a solar power purchase agreement?
Basically, a solar PPA is a financial agreement between a homeowner and Lumio. To start, Lumio agrees to design, permit, install, and most importantly, FINANCE the entire solar energy system on your home. You simply agree to buy power generated by the system sitting on your roof at a fixed rate that is significantly lower than the rate offered by your utility company.
Typically, the agreement lasts between 10 and 25 years. During the entire agreement, Lumio is responsible for the operation and maintenance of the system. All you really need to do is pay less for the electricity you consume. That’s it. You’ll start saving money as soon as the system is installed and switched on.
At the end of the agreement, the homeowner can choose to either extend the agreement to continue to save on their monthly utility bill, have Lumio remove the system from their home, or buy the system outright and own the system and all the energy it produces until the sun stops shining.
Think of it like this: we are financing, installing, and maintaining a mini power company right on your roof, and you agree to buy the power you use from that system at a fixed rate lower than what you are currently paying your power company. That's really it.
Can a solar PPA really save you money?
Yes! We won’t set you up for a PPA unless we know it’s going to save you money. Lumio will design a top-of-the-line system that will generate electricity to eliminate or drastically reduce charges from your electricity company. You would only be responsible for your solar PPA bill and a small utility bill for any extra power you need to pull from the grid—at nights, during cloudy days, or when you're consuming more than you're producing.
There are a few things that go into the specifics of how much you'll save:
- How much energy you use every month
- How much your utility company charges for power
- What solar energy incentives Lumio and your property are eligible for
- The size and specifics of the system Lumio can install on your property
Benefits of PPA's for Lumio Customers
Low Upfront Costs:
With a PPA, Lumio pays to install your solar power system. When you buy the system yourself, you’re paying for the design, the permitting, the installation, and if you finance the system with debt, you pay interest. With a PPA, Lumio pays for ALL of that. Most of the time, you won’t pay for anything upfront.
Lower Monthly Energy Bill:
With a solar PPA, Lumio is going to provide you with a monthly rate that’s LOWER than what you’re already paying for electricity. We do all the math up front. You’ll know exactly how much you’ll be saving every month before your system is even installed!
Predictable Energy Costs:
Lumio will analyze your energy usage and make sure that the energy produced by the solar panels will cover your energy needs. What you pay for energy won’t go up and down every month, and you won’t be subject to unpredictable rate increases that come with buying power from your power company.
Lumio Maintains Your System:
Since Lumio owns the solar power system on your home, we’ll make sure to maintain it (though we stand by all of our installed systems, regardless of who owns them. Check out our warranty info here).
Increase In Property Value:
It’s been shown that solar-powered systems on homes have increased property values. Since PPA’s can be easily transferred in the event of a sale of your home, you’ll be able to transfer the energy savings, too! A solar PPA makes a great additional benefit to a potential buyer of your property.
Should I Get A PPA or Buy My Solar Power System Myself?
Ultimately, choosing the right financing option for you comes down to solar incentives in your area, your eligibility for PPAs and other financing options like loans or cash, and what you feel the most comfortable with.
If you like what you’re reading, we’d love to give you an idea of how much you could save on your utility bill by switching to solar with Lumio. Click the link below to get in touch with one of our solar experts.