A solar Power Purchase Agreement (PPA) is the most common way homeowners go solar with $0 down. Instead of buying the system, a third-party owner installs and maintains solar panels on your roof — and you simply buy the electricity they produce, usually at a lower rate per kWh than your utility charges. No purchase, no loan, no upfront cost.
How a solar PPA works
- The system owner pays for the panels, installation, permits, and maintenance.
- You pay only for the power the system produces, at a contracted per-kWh rate.
- Your utility still supplies any extra power you need beyond what the panels make.
Because the per-kWh PPA rate is typically set below your utility's rate, your blended cost of electricity goes down — and a portion of your power cost becomes more predictable while utility rates keep moving.
PPA vs. lease vs. loan — the quick version
A PPA bills you for production (per kWh); a solar lease bills a fixed monthly payment regardless of output; a solar loan means you own the system and repay the financing. All three can be $0-down. Ownership changes who maintains the system and who benefits from incentives. See the full lease vs. loan vs. PPA comparison →
What to check before signing a PPA
- The rate and the escalator. Many PPAs include a small annual rate increase — compare it against your utility's historical increases.
- Production guarantees. Good agreements state what happens if the system underproduces.
- Maintenance and monitoring. With a PPA these are the owner's job — confirm it in writing.
- What happens if you sell the home. PPAs are typically transferable to the buyer; understand the process.
- End-of-term options. Renew, buy out, or have the system removed.
Who PPAs fit best
PPAs tend to fit homeowners with solid electric bills who want savings without ownership, maintenance, or financing on their credit. If you prefer owning the system and capturing long-term value, a loan may fit better — the right answer depends on your bill, roof, state, and goals.