PPA — Power Purchase Agreement
A Power Purchase Agreement is an arrangement where a solar company owns the solar system on your roof and you buy the power it produces at a contracted price per kWh. Terms usually run 20-25 years.
Compared to ownership: With a PPA you don't pay for the system upfront, and you don't own it. The tax benefits, including the federal Section 48E credit, go to the company that owns the system, not to you. You pay that company a monthly bill for the power, and many contracts include an escalator that raises the price every year. If you sell the house, the buyer has to qualify for and agree to take over the contract, or you may have to buy it out.
Also known as: Power Purchase Agreementsolar PPAthird-party-owned solar
Why it matters in Santa Cruz County
Since Section 25D ended on December 31, 2025, a homeowner who buys a system gets no federal credit, while a PPA company can still claim the Section 48E credit on the systems it owns. Some PPA offers lean on that difference. Before comparing, read the whole contract: its length, the annual escalator, what happens at the end of the term, and what selling the house would involve.
Sunrise's take
We don't sell PPAs and we don't recommend them. The federal Section 48E credit still goes to the company that owns a PPA system, but the contract structures common in this market are why we don't sell or recommend PPAs — 20-25 year terms, early-termination penalties, hardware liens that complicate selling the house, and payment escalators that erode the initial savings. We sell owned systems only (cash or GoGreen Financing). If you want a PPA anyway, vet the provider carefully — CSLB license check, customer references from installs three or more years old, and an attorney-reviewed contract of your own. We won't refer you to a specific PPA company because we haven't found one we'd stand behind.
Met this term in a quote or inspection report?
A free whole-home inspection turns jargon into a written assessment of your actual house — you keep the report either way.