Does solar PV require a major upfront cost?

Category: Financials

Typically not. The majority of our clients enter into a Power Purchase Agreement (PPA) with one of our reputable finance providers. A PPA allows the client to purchase the electricity produced by the solar system at a fixed rate over 20-25 years. The finance provider pays to construct the system and then owns it long term. This agreement benefits our clients, as the cost of the electricity produced by the solar system is usually lower than that supplied by the local utility. The contract also allows our clients to hedge against long-term energy cost inflation risk. This agreement does not appear as an ongoing liability on our clients financial statements. Most PPAs give the power purchaser the option to purchase the system at a later date, usually after seven years of operation.

A great example of a solar PPA is the Cincinnati Zoo and Botanical Garden, a Melink Solar project in 2011. View the Cincinnati Zoo Solar Video on YouTube by clicking here.

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