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Solar Prepaid Power Purchase Agreements – Homeowners Beware.

Solar Prepaid Power Purchase Agreements can be very misleading. A potential solar customer came to us recently to ask if we could match a proposal they received from a solar company that gave them a proposal for a solar Prepaid Power Purchase Agreement (PPA). At first glance, it appeared that the other proposal was a better deal, but after reviewing the proposal we found that couldn’t be further than the truth.

A few key points we noticed:

  • The proposal claimed to offset 94% of the power usage of the homeowner, but in reality it only offset 67% of the power usage. There were several math errors we found in the proposal. Homeowners: check the math in the proposals you receive to make sure the calculations are accurate. They might not be!
  • The agreement also said it would guarantee 90% of production in the first year. Homeowners: power guaranteed in the first year should be 100%! It’s a brand new system!
  • Nothing in the proposal mentioned what kind of panels or inverters would be used. At SOLAR SOURCE® we only install Enphase micro-inverters. With micro-inverters if one panel is shaded, it won’t affect the output of the entire system. With string-inverters, if one panel is shaded it affects the output of the whole system. The system the homeowner was quoted in this PPA proposal included 2 string inverters with an unknown brand. Homeowners: it is extremely important that you know the type of inverter you are being quoted, otherwise it could be an apples to oranges comparison.
  • The panels that were quoted in the proposal had no brand listed either! There are many solar panel options out there and the quality varies greatly. The brand and type of panel installed is an integral part of your solar system. The quality and output of the panels will determine the future output and the life of the system. Homeowners: Always insist on knowing the brands being used on your solar project and do your research on them. We only use top of the line quality panels including LG and Q-Cells.
  • The worst and most misleading part of the proposal was the way the federal tax credit was outlined. In the proposal the total cost of the system was listed as $50,000, however that price already included the Federal tax credit, so the cost of the system was actually more than $70,000! The total cost of the system that we listed in our proposal was $52,000. TOTAL. From that $52,000 the homeowner would still receive the 26% federal tax credit, so the cost of the solar system with us was far less than what they were quoted from the PPA. Homeowners: Look at the way the tax credit is outlined in your proposal. It could be very misleading!

The bottom line here really is: Do your research, compare quotes, double check the math and compare apples to apples.

SOLAR SOURCE® is a Southern California based solar contractor. Our top priority is providing high-quality, custom solar systems that save you money and provide you the best value. For a free solar energy analysis, fill out this form, or contact at 562-852-5626 today!



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