The solar energy industry has seen massive growth in recent years, and as costs decrease, more people and businesses are adopting solar power. However, the high upfront cost of installing solar systems remains a significant barrier for many. While loans are an option, they often come with high interest rates and monthly payments, making them less appealing to some homeowners. This is where Third-Party Ownership (TPO) models, such as leases and Power Purchase Agreements (PPAs), come into play. These financial models make solar energy accessible without requiring a large initial investment, allowing more people to benefit from renewable energy.
What Are TPOs (Leases and PPAs)?
TPO models allow homeowners and businesses to install solar systems without paying the full upfront cost. In a TPO agreement, a third-party investor (typically a solar provider) owns the system, and the customer pays for the energy produced:
- Solar Leases: The customer rents the solar system from the provider and pays a fixed monthly fee, benefiting from the energy produced without owning the system.
- Power Purchase Agreements (PPAs): The customer buys the energy generated by the system at a fixed rate per kilowatt-hour (kWh), often lower than the local utility’s price.
Both models remove the burden of upfront costs, making solar affordable and accessible to a wider range of people.
Why Are TPOs Important?
TPOs are reshaping the solar and storage industry. Here’s why they’re so critical today:
1. Zero upfront costs
The most significant benefit of TPOs is that they eliminate the need for a large upfront investment. A typical solar system can cost tens of thousands of dollars, putting it out of reach for many. With TPOs, customers can avoid this initial barrier and start saving on energy costs immediately by paying a fixed monthly amount for the energy generated.
This is also important for businesses that want to adopt solar energy without impacting cash flow or securing expensive loans.
2. Predictable and lower energy costs
Traditional utility companies often have fluctuating energy prices, making it difficult to predict energy expenses. TPO agreements, on the other hand, offer predictable payments throughout the contract term. This stability helps homeowners and businesses plan their energy budgets more effectively.
In some cases, PPAs and leases also allow customers to lock in lower energy rates, providing long-term savings over fluctuating utility prices.
3. Hassle free maintenance and repairs
In most TPO agreements, the solar provider is responsible for maintaining the system.
- Systems monitoring
- Repairs and maintenance
- Performance optimization
For customers, this means no unexpected maintenance costs or system failures to worry about, ensuring the system remains efficient throughout its lifespan.
This hands-off approach makes solar even more attractive to those who don’t have the expertise or time to manage system upkeep themselves. Additionally, this maintenance model helps ensure that the system is operating at peak efficiency, which means the customer can enjoy optimal energy production throughout the lifespan of the system.
4. Flexibility and no long-term commitment
TPO contracts usually last between 10 to 25 years, but they offer flexibility. At the end of the contract, the customer can choose to:
- Purchase the system
- Renew the agreement
- Have the system removed
This flexibility allows homeowners and businesses to adjust their energy solutions as their needs evolve.
For instance, if a customer decides to move or no longer needs solar energy, TPOs make it easier to exit the agreement without being locked into a long-term commitment.
5. Increased property value
Even though customers don’t own the solar system in a TPO arrangement, installing solar systems still adds value to a property. Properties with solar systems are more attractive to potential buyers, and many prefer homes with existing leases or PPAs since they can continue enjoying solar benefits without the upfront costs.
Moreover, many solar providers allow TPO agreements to be transferred to new homeowners, making it even easier to sell a solar-equipped property.
6. Accelerating the renewable energy movement
As we face the global challenges of climate change and environmental degradation, it’s critical to reduce our reliance on fossil fuels. By providing affordable and flexible financing options, TPOs help drive the transition to a cleaner, more sustainable energy future.
The role of solar and storage
As energy needs evolve, the combination of solar and storage solutions are gaining popularity. With a solar-plus-storage system, customers can
- Store excess solar energy it at night or during power outages.
- Reduce reliance on grid, increasing energy independence
TPO agreements are also becoming more common for solar-plus-storage systems, enabling customers to access both solar and storage without large initial investments. As storage technologies become more affordable and efficient, TPOs will continue to play a significant role in expanding energy independence.
TPOs on Solargaf
To make selling easier, we are working with the best-in-class TPO providers in the market. Solargraf’s shading analysis is approved by most TPO providers, including Enfin, Goodleap, Lightreach, and Posigen ensuring accurate and reliable system modeling. Additionally, we are actively working to integrate all our financing partners directly into the platform, streamlining the process even further for solar professionals. The following integrations are currently supported on the platform:
- Enfin TPOs: Enfin provides flexible financing solutions for both leases and PPAs, offering competitive rates and customizable terms to help customers find a solution that fits their needs and budget.
- Goodleap TPOs: Goodleap is known for its simple and transparent financing options, helping customers install solar systems with no money down. Their flexible payment structures allow homeowners and businesses to enjoy the benefits of solar energy without the burden of upfront costs.
Applying for financing through these partners on Solargraf is seamless. Simply integrate with your preferred financing provider using your credentials, import the applicable products for your project, and choose from the available monthly payment options. Once selected, you can submit the application directly from Solargraf. Plus, if any unplanned changes arise, our platform supports change orders, ensuring flexibility throughout the process.
Solargraf empowers solar professionals by also enabling them to model custom TPO offering tailored to their business needs. With flexible financing configurations, and adjustable leases and PPA terms, installers can create personalized proposals that maximize savings and customer appeal. This ensures a streamlined process for offering third party ownership solutions that align with both business goals and homeowner preferences.
Solargraf’s TPO financing solutions make solar energy more accessible, affordable, and hassle-free for both homeowners and businesses. Through our trusted partners, Enfin and Goodleap, we simplify the financing process, helping customers adopt solar without the upfront costs.
With flexible payment options, seamless integration, and built-in support for change orders, Solargraf ensures a smooth experience for solar installers.
Ready to simplify solar financing and grow your business? Harness the power of Solargraf’s TPO solutions today!
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