Signing a Solar Installation Contract: What You Need to Know


Are you thinking of going solar? You are not alone. In fact, recently, a growing number of people have been investing in solar rooftop installations in Florida. This is one of the best ways to reduce your carbon footprint, and at the same time, pay less for energy.

Before you sign the dotted line though, there are a few things you need to know about. For example, you need to know about PV system testing so that you don’t end up with a system that does not meet your requirements.

You will also have to choose between rooftop vs ground-mounted solar panels, and whether you will need a battery backup power supply for your home. Most importantly, you need to know what you should be looking for in solar contracts so that you get only the best deal.

We’ll cover all of that and more in this post.

Solar Financing Options

If you’re looking to finance a solar panel installation, you have a few different options to choose from. Here are three of the most popular financing options available at PPM Solar:

Solar Loan

Solar loans are a type of loan that can be used to finance the purchase and installation of PV panels. These loans typically have low-interest rates and long repayment terms, making them a good option for those who need help financing their PV panel installation.

Pros Cons
The homeowner can apply for and receive any federal or state solar tax incentive It is difficult to get a loan
Homeowners own the PV system Homeowner is responsible for maintenance
The overall cost is usually low

Solar PPA

A PPA is a financial agreement in which a developer or utility company buys and installs PV equipment on the consumer property, and the consumer agrees to pay a specific amount to the developer in exchange for using of the energy for a specific amount of time.

In a PPA contract, you don’t own the PV equipment. The company is also the one that will enjoy any tax incentive or SREC.

Pros Cons
Little or no upfront cost You may have to pay an early termination fee.
The provider is usually responsible for repairs and maintenance Tax incentives do not belong to the customer
You own the PV equipment at the end of the contract Some providers don’t have the option for customers to purchase at the end of the contract

Solar Lease

Solar Lease

Leases are a popular financing option for those who can’t afford to purchase PV panels outright. With a solar panel lease, you agree to pay a monthly fee to the leasing company in exchange for the use of their equipment. Leases typically have a term of 20 years or more, and at the end of the lease, you have the option of renewing or owning the system outright.

Pros Cons
Little or no upfront cost You may have to pay an early termination fee.
The provider is usually responsible for repairs and maintenance You are not eligible for tax incentives
You own the PV equipment at the end of the contract Lease contracts are usually really long-term

Key Components in a Solar Energy Contract

Key Components in a Solar Energy Contract

While every solar panel contract differs by the provider, some of them follow a similar template. Here are some of the core components you will find in most contracts.

  1. System Description: This section is there for you to know what you’re buying and exactly what you’re getting. This typically includes the size of the PV panels, output accessories, and so on.
  2. Financial Summary: The financial summary in a solar installation contract provides the total amount of money that you will pay for the PV panels and installation. It also includes how much you’ll be paying per kilowatt hour (kWh) of electricity.
  3. Overview of the Installation: A solar power contract must include an overview of the installation. It should also contain details on any permit or permit application that may be required.
  4. Energy Savings: The energy savings that you’ll receive are important because they show how the PV panels will benefit you. This is especially important for businesses with solar panel signage. You don’t want something that wastes too much power when you are not open for business.
  5. Billing Summary: This section includes information on how often you’ll be billed and for how long.
  6. Information on Warranties and Maintenance: How the provider handles repairs and maintenance are important things to know before installing solar panels. You want to be sure that the system is properly installed and that it will operate properly for the number of years that you’re paying for.
  7. Legal Requirements: A typical PV contract must include legal requirements and details. These legal requirements include details like terminations, waivers, and so on.

What to Look Out For in a Solar Agreement?

What to Look Out For in a Solar Agreement

When you look at the contract, you should be looking to see that it has everything that you need, and the flexibility that you want. For example, can you cancel a solar panel contract before installation? Is there anything like a termination fee?

You don’t want to get stuck with an agreement that makes you feel like you are being taken advantage of. You also want to make sure that you are getting a good price for your system. The most important thing though is to make sure that the solar lease agreement is fair for you.

Bottom line

Whether you’re shopping for a solar system or just curious about how a PV power system works, it is important that you know what the installation contract entails. Hopefully, this article has helped you understand solar contracts and what it means for you.

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