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Solar Loan vs. PPA – What’s the Difference?

Solar energy is quickly becoming more affordable than ever for Massachusetts homeowners. Tax incentives and state rebates drive down the initial cost, however the remaining balance of an array is still a considerable sum. Sunlight Solar Energy has partnered with several groups to reduce or even eliminate those upfront costs with a financial plan tailored to each homeowner.

Sunlight Solar has a wide variety of financing options. Our two newest are the SunRun Power Purchase Agreement and the SunPower 20 Year Loan. Here’s a comparison of how those deals work.

The SunRun Power Purchase Agreement (PPA) is an agreement through which SunRun will purchase the solar array designed and installed on your home by Sunlight Solar. You, the homeowner, then purchase the power from your solar panels from SunRun at a fixed rate. SunRun covers all maintenance, monitoring, and insurance of your system during the life of the 20 year agreement. After the 20 years is up, you have the option to purchase the solar array at fair market value, or have it removed at no cost to you.

SunRun offers two power purchase options:

  • A prepaid option in which you purchase 20 years worth of clean, solar energy at a rate lower than that of the utility company.
  • Or, a fixed monthly payment with a low upfront cost between $0 and $1,000.

Homeowners taking advantage of the SunRun PPA program can enjoy low, fixed energy costs for the term of the agreement but are unable to take advantage of tax incentives and rebates.

The second program currently being offered is a 20 Year Loan with our partner SunPower. This loan is an unsecured loan, meaning that it is not tied to your home equity. The 20 Year Loan offers a low interest rate and the option to re-amortize in the first 18 months. As opposed to the PPA, those who utilize the loan option have full ownership of their solar array and are able to take advantage of all the tax incentives and rebates.

The bottom line:

  • With a PPA, you pay a set amount for power generated by the solar panels with little to no money down. All maintenance and monitoring is covered by SunRun.
  • With a loan, you own the panels and pay a monthly installment towards the loan. All eligible rebates and SRECS go directly to you, the homeowner.

Both options offer instant savings over the cost of dirty energy. Want more information? Contact us for a free site evaluation and we’ll provide you with a professional proposal complete with financial options tailored to your needs.


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