Solar Power Purchase Agreement


As I’ve mentioned here before, I’ve had a Solar Power Purchase Agreement (PPA) since July of 2013.

So far the system has produced almost 2000 kW-h, which is in line with the contract proposal from the Solar PPA provider (approximately 4000 kW-h produced per year).

The overall utility bill for the GubMints family has dropped by 20-35 dollars per month (on a total bill of 120 – 200 dollars per month). Not too bad for not having any skin in the game!

Sadly, for those still sitting on the sidelines waiting to sign a rooftop solar PPA, the salad days may be over.

California recently passed AB 327, which alters the way ‘Net Metering’ consumers pay for (and are compensated for) electricity they consume/generate.

In general, the bill will establish a monthly ‘connection fee’ for all users, and then flatten out the rate structure for everyone. This means heavy users of electricity won’t pay rates that are many times higher than very light users of electricity.

‘Sellling back’ the power your rooftop solar panels produce at ‘retail’ rates is the entire business case for rooftop solar. Without the utility company ‘paying you’ to produce power at 15 or so cents per kW-hr, the economic argument in favor of rooftop solar falls apart (at least until the prices of panels drop far below $8/kW installed). At present, only a handful of states (mostly in the Southwest) have favorable Net Metering regulations.  With California as a hugely populated state and trend-setter, bills similar to AB 327 could spell the end of net metering as we know it in the few states that presently have favorable economic conditions for rooftop solar.

What to do? If you’re on the fence about rooftop solar, it’s probably a good idea to keep track of political developments in your state as they relate to Net Metering. It’s a HUGE economic food fight between the Utility Companies on one the side, and the Large Solar PPA Producers (like public school districts and major Big Box retailers) on the other side.

You can find out more at (Solar Energy Industries Association) or (a lobby on behalf of the California Utility companies).  Note that both sites represent diametrically opposing viewpoints- The reader is on his/her own to sift out the truth.

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2 thoughts on “Is Rooftop Solar Losing its Luster?

  1. Thanks for the update, Eddie. I think governments all over the world are trying to reduce their photovoltaic subsidies, and California’s change to net metering is an unfortunate precedent.

    Does this change your PPA with the installer, or are you grandfathered from the effect of this law?

    • Doug –

      Welcome back! As far as I can tell, existing PPAs (like mine) are ‘grandfathered’ in- But this is only etched in sand by the ‘signing statement’ the governor attached when he signed the AB 327 in to law.
      I think the law needs to trickle down to the Public Utilities Commission before the interpretation and regulations are official.


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