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Thinking About Signing Up for a Traditional PPA?

Think Again.

Monthly Power Purchase Agreements (PPAs) can look easy on day one, but they often carry escalating rates, limited control, and 25-year contract risk. Use the calculator below to see the real long-term cost before signing.

Solar PPA Cost Reality Check

See the true cost of a traditional Power Purchase Agreement (PPA) with escalating rates over 25 years

Future Monthly Payments

10 Years:$258.95
15 Years:$307.55
20 Years:$365.28
25 Years:$433.83

Total Cost Over 25 Years

$88,805.67

Escalator Cost

$31,805.67

What the escalator alone will cost you

Our Clients Typically Save 50-60% vs. Traditional PPA

Estimated Savings:$35,522.27

Monthly Payment Growth Over 25 Years

Low upfront cost, highest long-term cost

Monthly Power Purchase Agreement (PPA)

A monthly Power Purchase Agreement is often presented as a way to "buy solar" without "debt," but the homeowner does not purchase the system. A third-party company owns the equipment, and the homeowner agrees to purchase the electricity it produces, often for 25 years.

The Initial Appeal

  • No upfront cost.
  • Low credit scores may be approved.
  • The starting payment may be lower than the current utility bill.
  • Monitoring, maintenance, and warranty claims are typically handled by the system owner.

The Long-Term Problems

  • You do not own the system. After years of payments, the equipment may still belong to the PPA provider.
  • Your price typically increases every year. Many PPAs include a 2.9% to 3.5% annual escalator.
  • The total cost can be enormous. Over 25 years, a PPA can cost roughly three times the original cash price of an equivalent system.
  • Selling the home can become complicated. The buyer may need to qualify for and assume the agreement, or the seller may have to negotiate an expensive buyout.

Escalators Compound Fast

A 2.9% escalator nearly doubles the electricity rate by year 25. A 3.5% escalator more than doubles it. The calculator above shows how a small annual increase turns into a major lifetime cost.

Control Over the System Is Limited

  • Equipment placement may prioritize production over appearance. Because the provider is paid for the electricity produced, panels may be placed on highly visible roof sections, even when the final design is unattractive.
  • Upgrade options are limited. Adding batteries, expanding the system, changing equipment, or replacing the roof may require the system owner's approval.
  • Early buyouts can be expensive. The option, price, and timing are controlled entirely by the contract.

A 25-Year Contract Based on Today's Utility Rules

This may be the biggest risk. A PPA is sold using today's electric rates, solar credits, and utility rules, but California's energy market can change dramatically during a 25-year agreement.

Homeowners have already experienced new Time-of-Use rate periods, reduced export credits, new battery and non-export requirements, major differences between NEM 1.0, NEM 2.0, and NEM 3.0, and utility rate structures that reward energy storage instead of daytime solar production.

The PPA payment and annual escalator continue even when utility rules change. You could be required to purchase every kilowatt-hour the system produces while receiving only a small credit for electricity exported to the grid.

Why SHS Power Does Not Sell Monthly PPAs

SHS Power does not offer traditional monthly PPAs. We believe a 25-year contract, escalating electricity prices, limited equipment control, home-sale complications, and exposure to future utility changes are major red flags for most homeowners.

SHS Power prefers options that provide a clearer path to ownership:

  • ✓Cash or a $0 down traditional solar loan for immediate ownership and maximum flexibility.
  • ✓A Prepaid Energy Service Agreement for substantial upfront savings, no monthly solar payment, no annual escalator, and a defined path to ownership.

The Bottom Line

A monthly PPA may offer the lowest payment on day one, but it is usually the most expensive way to go solar over the life of the agreement.

Do not compare only the first month's payment. Ask to see the full 25-year payment schedule, total contract cost, escalator, transfer requirements, and buyout terms before signing. The math gets ugly fast.

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