The Dark Side of Solar Power Purchase Agreements


The Dark Side of Solar Power Purchase Agreements

 

As I’ve mentioned elsewhere, I recently signed a contract to put solar Photovoltaic (PV) panels on the roof of the GubMints home.

Are you thinking about rooftop solar? Here’s the drawbacks I carefully weighed in the decision process:

You’ve just become a Commodities Trader. You just signed a contract to purchase a finite amount of electricity for 20 years, at a price that ratchets upward every year at a negotiated rate. This is the textbook definition of a ‘Commodities Option Contract’. In other words, you’ve just placed a bet that the electricity price you locked in today is cheaper than what it will become over the next 20 years. Continue reading