Reducing your electricity costs can be achieved through various methods, like managing unsuspecting energy hogs in your space, participating in incentives and rebates, and switching to more sustainable practices like installing solar panels on your property.
If you’re considering the latter, learning more about your commercial solar options to reduce your monthly bills is a good idea. Two popular choices you’ll find when shopping around are a Power Purchase Agreement (PPA) or a solar lease.
What is a Rooftop Solar Lease?
A rooftop solar lease is an arrangement where a property owner allows a solar company to install and maintain solar panels on their roof in exchange for a monthly lease payment. Catalyst Power will pay you to lease your rooftop space to us! We will build, own, and operate the solar array for you, and sell the energy elsewhere.
No, your building will not directly consume the energy produced by the on-site solar array (more on that below if you choose a PPA), but your business becomes a local asset to your community for the renewable energy your building produces annually. This is great news for your ESG goals, and you can sit back and collect your monthly payment!
What are Power Purchase Agreements?
A PPA is an arrangement in which a third-party developer installs, owns, and operates an energy system on your property and sells you back the energy produced (usually at a lower fixed rate). Under a PPA, this developer covers all maintenance and installation costs with no upfront fees on the customer's end. Typically, PPA charges (rates measured per kilowatt-hour – kWh) will vary monthly based on the solar panel’s production.
Our solar glossary explains PPAs and other associated terms.
How Do They Compare?
When talking about third-party solar options, the savings are in the details. Both are good alternatives to reduce your building’s carbon footprint and energy costs. For example, at Catalyst Power we offer both: our Connected Microgrid® solution includes a PPA, allowing you to pay only for the electricity generated, while our rooftop solar lease program pays you for leasing your unused rooftop space for a solar panel installation. Choosing a solar lease can make budgeting easier with fixed, predictable monthly payments. On the other hand, a PPA links your payments to the actual energy produced by the system, ensuring you only pay for the power you use. Both options offer unique benefits, so you can select the one that best fits your financial strategy and energy needs.
Incentives—If you own your solar panels, you can benefit directly from clean energy incentives, but it also means that you’re responsible for the maintenance costs, too. When leasing or entering a PPA from a company like Catalyst Power, we (or that other company) will own the solar panel system and thus claim the incentives. As a result, we can offer you lower rates by utilizing fixed payments over time.
Maintenance—When you lease from an energy service provider like Catalyst Power, you’re not responsible for the maintenance and installation of your solar panel system (that’s our job). Whether you choose a lease or PPA, no customer is responsible for caring for the equipment.
Savings—When you sign up for a rooftop solar lease, Catalyst Power will pay you a monthly fee to lease your roof to build a large solar array. Think of us as your tenants, and you’re our landlord. The same amount of money comes straight to you monthly! Since PPAs are based on a rate per kWh, you’ll sometimes save more with a PPA over time, particularly during the summer months when the panels typically generate more electricity with longer daylight hours (and intensity). This means that with a PPA, you benefit more directly from the increased energy production and potentially save more compared to the fixed monthly payments of a solar lease.
The main drawbacks you’ll find for both a PPA and a solar lease are straightforward: Unfortunately, under either agreement, you do not own the solar panels, and you can't directly claim the incentives and tax rebates.
However, by understanding how a rooftop lease and PPA work and their associated benefits, you can make an informed decision that aligns with your business goals and financial strategy. As the shift towards renewable energy continues to evolve, options like commercial rooftop leases and PPAs allow businesses to participate in solar and enjoy the benefits of clean, sustainable energy.
| Key Takeaways |
| A rooftop solar lease from Catalyst Power pays you a fixed monthly payment to host solar panels on your unused rooftop space. |
| A typical PPA allows you to pay a lower rate for your power over time based on the electricity you produce. Through Catalyst Power, you sign a PPA with us at no upfront cost. |
| Whether you choose a solar lease or a PPA through Catalyst Power, you do not own the solar panels and are not responsible for maintenance and installation. |
