Financing Resources SummaryFinancing Resources • April 11th, 2014
Power purchase agreements are the simplest and most important component financing the drive toward net zero buildings today. Power purchase agreements allow building owners to keep equipment such as solar panels off their balance sheets even when such panels are on their roof generating their electricity. This is because a power purchase agreement centers upon the provision of energy services (electricity) rather than the panel itself. For years, accountants have warned that the Generally Accepted Accounting Principles (GAAP) that allow this structure would be transitioning to a model that does not allow power purchase agreements to remain off balance sheet. An excellent but somewhat dated discussion of the topic is available here. Organizations that offer PPAs often also offer a slightly different ownership model known as solar leases. Some examples of organizations offering these financing models are Solar City (national) or Suncommon (VT).
