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New Jersey’s Authority on Solar Energy (732) 269-0308

For the consumer, power purchase agreements are very similar to lease agreements. However, they are different programs. In the lease, the homeowner has an interest in solar equipment. In a power purchase agreement (PPA), the homeowner does not have an interest in the solar panels. Instead, the homeowner plays a role as a host for the solar system. The difference is important because it changes how the homeowner gets power from the solar panels and the price that they pay for the energy.

With a PPA, you do not own the electricity that the solar system generates. Instead, you purchase the energy from the installer of the solar system. Usually, this solar energy will be more affordable than the power sold by the electric companies. However, there is no guarantee that rates will remain lower. It is possible that the rates will become higher, depending on supply and demand. After all, the rates are based on the cost of installation, maintenance, and equipment, while electric rates have some additional variable factors. In those instances, you may be paying more for solar than you would to purchase electricity from the grid.

If PPAs have a risk of being more expensive than electricity from the grid, you may wonder why anyone would choose to use PPAs for their electricity. Generally, this is the option for people who cannot qualify for leases or loans. However, it can also be a good option for people who only plan to be in their homes for a short period of time. For those people, they can estimate the lower costs for a short-term period of time.

Even without financial savings, solar has benefits. First, it can help you be energy independent. Your solar system may generate enough energy that you do not have to rely on the grid, especially if you combine it with power banks or batteries. There is also the benefit of being the better environmental option. Green energy is green energy, even if it is not saving you any money.

There are two types of power purchase agreements: physical power PPAs and virtual PPAs. In physical PPAs, you buy the electrons from the solar system. You are responsible for using them or selling them. In virtual PPAs, you do not have to monetize the electrons, instead you pay for services and are not responsible for selling any excess energy to the market. The type of PPA can be important because it can determine who gets credit for the renewable energy certificates.

Confused? Do not worry. That is why we are here to help. We can give you an estimate for a solar system and help you understand your options. That way, you can get green energy in a format that works for you and your family.

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NJ Solar has been the Solar Power Professionals for over 20 years! Today, the state of New Jersey is a national leader in solar energy, but it wasn’t always that way. New Jersey Solar Power LLC has been there since the beginning of the solar energy revolution in NJ.

With awards for Environmental Excellence and the New Jersey Clean Energy Project of the Year, we’ve built a reputation worthy of being your partner in clean, efficient solar energy. Contact us today to get free customized pricing that’s tailored to your home or business.