Solar Power Purchase Agreement

Solar Power Purchase Agreement


The Solar Power Purchase Agreement (PPA) allows building owners to experience the benefits of solar energy without the burden of owning and maintaining a solar PV system.

Program benefits

  • The freedom and independence of producing electricity to power your property, instead of buying solely from the utility.
  • Day 1 savings on electricity costs. PPAs are priced to provide a discount to existing electric rates, so savings begin once the system is energized.
  • Peace of mind knowing the solar system is installed, insured and maintained as part of your PPA contract.
  • Multifamily properties (5+ units, income eligible and market rate)
  • Private and non-profit owners, public housing authorities, senior/assisted living communities, co-op / condominium associations, etc.
  • We will work with your selected installer to manage the installation of the system, and then manage and maintain the system for the contracted term.
    • Instead of paying the utility company for your electricity, you buy lower cost electricity from your solar system through your PPA.
    • When your agreement term ends, you have the option to extend your PPA, purchase the system, or have it removed at no cost.
  • When your agreement term ends, you have the option to extend your PPA, purchase the system, or have it removed at no cost.
  • Connecticut Green Bank prescreens installers, and owns, maintains and insures the system for the full 20 years.
  • Connecticut Green Bank provides full warranty management on all equipment.
  • Multifamily property owners have the option to purchase their installation after 6 years.

Contact us to learn more.

Solar FAQ

Solar upgrades are best accomplished with the help of an experienced partner. Connecticut Green Bank’s Multifamily team is here to help you source a qualified contractor and provide the financing to get the job done. While the information below will provide some helpful background, we look forward to speaking to interested property owners about their specific solar needs. For more information, please email multifamily@ctgreenbank.com or call (860) 257-2333.

Q: I am interested in installing solar on my multifamily property, what factors should I consider?

A: There are several factors to consider, including:

  • What is the current condition of my property’s roof? Does any part of my roof (shingles, beams trusses, etc.) need repair/replacement in the next 5-10 years before a solar PV system is installed?
  • How appropriate is my property for solar? This is determined by a roof’s available surface area and its ability to receive continuous sunlight without obstruction (for example, from shadows caused by buildings, foliage or other impediments).
  • Would I prefer to own the PV system and receive the associated tax credits, or lease my system via power purchase agreement (PPA)? Note: in general, project economics and logistics for non-profit property owners are more beneficial via a PPA, which monetizes and passes along the benefit of the federal tax credit.

In a direct purchase scenario, the customer owns the right to the project’s federal investment tax credit (ITC), and warranties are provided by the original equipment manufacturer. In third-party owned projects, the third-party owners receive the project’s tax credits, and the customer typically receives an insurance and warranty package to handle customer issues with the PV system.

Who pays my tenants’ electric bills if I install a solar system?

For properties where the owner pays for tenants’ electricity (referred to as “master metered” properties), the owner can place the solar system behind a single electric meter and directly benefit from cost savings. Projects where tenants pay their own electric bills requires taking advantage of Connecticut’s sub-metering rules, which allow owners to pass on the costs and savings of solar to their tenants on their electric bills. Typically, sub-metering economics and logistics are most effective for very large multifamily properties.

Q: What incentives are available for multifamily solar installations in Connecticut?

A: The federal government provides an investment tax credit (ITC) for projects for 26% of eligible project costs, stepping down to 22% in 2023, as well as accelerated depreciation. The State of Connecticut provides incentives for solar projects in the form of zero-emissions renewable energy credit (“ZREC”) contracts between approved projects and participating utilities (Eversource and United Illuminating) through the end of 2021.

What are ZRECs?

ZRECs are contracts between utilities and renewable energy project owners that provide long-term compensation to those owners for the clean electricity the projects generate. Projects must meet eligibility requirements and are selected via utility auction. One ZREC is yielded for each megawatt hour of energy generated by an approved renewable generation unit. For more information, please visit https://www.eversource.com/content/ct-c/residential/save-money-energy/explore-alternatives/renewable-energy-credits/small-zrecs, or consult with an experienced solar developer or the Green Bank.

Q: How do I obtain ZRECs for my project?

A: ZRECs are allocated annually via reverse auction (lowest bids are accepted first, with successively higher bids accepted until the total pool of ZREC contracts are allocated) for larger systems, and via lottery for smaller systems. An announcement that describes important auction / lottery dates, policies, and procedures is made at the beginning of each calendar year. To learn more, visit:

A Connecticut Green Bank-approved solar developer can handle this process for interested property owners.

 

Q: How do I select a multifamily solar contractor? What sorts of qualifications should I consider?

A: Background questions to ask or consider when evaluating potential solar contractors include:

  • How long has the solar developer and/or installer been in business?
  • Does the developer/installer have extensive experience with multifamily and/or commercial solar projects?
  • Is the solar installer properly certified and licensed to perform commercial solar installations in Connecticut?
  • What is the solar developer/installer’s reputation in the market (are there online reviews or sample projects available on the installer’s website)?
  • Do you know anyone who has used this solar developer/installer before? Has the developer/installer provided you with/have you reviewed the developer/installer’s references?

Connecticut Green Bank is happy to provide a list of solar developers who have extensive experience serving multifamily properties.

For more information and a list of pre-screened solar installers, contact us at multifamily@ctgreenbank.com or call (860) 257-2333

1 Some questions taken from the Clean Energy States Alliance’s “A Homeowner’s Guide to Solar Financing: Leases, Loans and PPAs,” May 2015.