With a PPA, a solar finance company designs, purchases, installs, and typically maintains the system that is hosted on the homeowner’s property.
The homeowner is required to buy 100% of the energy produced at a cost set out by the solar finance company. Typically, the rate at which you purchase the electricity for escalates over time (e.g. 2% per year).
Solar leases are modeled very similar to the third-party PPA. The primary difference between the lease and PPA lies in how the payment is structured.
Under a PPA, the homeowner is buying electricity from the solar finance company, and payments are made for all of the electricity produced.
With a lease, the homeowner is making monthly lease payments and there is no sale of electricity.
In both cases, the system would be owned by the solar finance company.
In the event of a move, the homeowner would have to transfer the contract to the homebuyer if the buyer meets the credit requirements of the third-party solar finance company, or a buy-out by paying for the energy for the remaining term of the contract.