How Prepaid Power Purchase Agreements Make Solar Panels Affordable
A power purchase agreement (PPA) is the most affordable way to install solar panels on your roof in Sonoma County. The prepaid PPAs we offer significantly reduce the upfront cost of a solar panel installation—typically by 30% of the system’s total cost.
In this guide, we explain what a prepaid PPA is, how it works, and the key benefits to help you decide whether it’s the right solar financing option for you.
What Is a Power Purchase Agreement (PPA)?
A prepaid power purchase agreement is a contract between you and a financing partner.
You make a reduced upfront investment—typically around 70% of the system's total cost—and our financing partner covers the rest. You can choose to pay cash or finance through your preferred bank or lender.
Our financing partner will claim the 30% solar tax credit, which has been eliminated for homeowners but still exists for commercial businesses, and make extra profit with depreciation (another commercial tax benefit). Then, they pass the tax savings on to you through the reduced upfront price.
For the first 6 years, our financing partner will own the system, though you’ll be the one benefiting from the power it produces. At the end of the 6th year, they’ll transfer ownership over to you, and you’ll enjoy decades of ongoing electric bill savings.
Who Benefits from a PPA?
A prepaid power purchase agreement benefits both you and our financing partner.
You, the homeowner, benefit from a more affordable solar panel installation and decades of electric bill savings.
Our financing partner benefits by claiming the tax incentives the system qualifies for, which are only available to commercial businesses.
How Prepaid PPAs Reduce the Cost of Going Solar
1. Lower Upfront Investment
A prepaid PPA lets you pay less up front for solar. Most of our customers pay just 70-75% of the total cost of the solar energy system, which can include battery backup.
2. No Waiting for Tax Refunds
You don’t have to wait around for tax season to realize your savings. Our financing partner will pass them on to you immediately through the reduced installation cost.
3. No Maintenance Costs for 6 Years
Maintenance and monitoring are included with every prepaid PPA.
What are the Benefits of a Prepaid PPA?
A prepaid power purchase agreement has many benefits for Sonoma County homeowners, including:
Pay Less for Solar Panels - You’ll only pay around 70-75% of the system’s total cost. That means you're still getting the same relative value as the abolished residential solar tax credit.
Immediate Savings - You realize your savings immediately instead of waiting around to receive a credit come tax season.
No Maintenance Costs - During the first 6 years, our financing partner will own your solar panels and be responsible for all maintenance costs.
Assume Ownership After 6 Years - After the 6-year term is complete, you’ll assume ownership of the system. This is a much shorter term length than a standard PPA and ensures you get the full value of your investment without price increases or added fees.
Does a Solar PPA Make Sense for Your Home?
There are several ways to pay for solar panels, including cash, loans, leases, and PPAs. The right financing option for you depends on your priorities and budget. At Taylor Energy, we can help you compare buying vs leasing solar panels to help you decide which financing option makes the most sense for you.
Call (707) 494-6008 today to schedule a free solar consultation.
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