Lease vs. PPA Comparison
This information is for discussion purposes only. Please contact Jordan Thomas, Inc. for further information.
| Loan | Lease | PPA |
System Owner: | Customer | Lessor | Power Provider |
Term: | =<10 years | 10 years | 20 years |
Accounting Treatment: | On balance sheet | Normally off balance sheet | Always off balance sheet |
Construction Financing: | Yes | Yes | Yes |
Credit Consideration: | Most customers | Most customers | Longer term requires investment grade or near investment grade credits |
Pricing: | Fixed or floating for the term | Fixed payment for the term | Fixed rate based upon per kWh produced for the term |
Payment Inflation Rates: | N/A | varying typiclly 5% | 5varying typically 5% |
Payment: | Montly or quarterly | Montly or quarterly | Monthly or quarterly |
Federal Energy Tax Credit: | Customer's account | Lessor's account | Power Provider's account |
Federal Depreciation: | Customer's account | Lessor's account | Power Povider's account |
State Depreciation: | Customer's account | Lessor's account | Power Provider's account |
State Incentives: | Customer's account | Lessor's account | Power Provider's account |
Renewable Energy Credit (SRECs): | Customer's account | Customer's account | Power Provider's account |
Carbon Credits: | Customer's account | Customer's account | Power Provider's account |
Expenses: | Customer's account | Customer's account | Power Provider's account |
Insurance Liability: | Customer's account | Customer's account | Power Provider's account |
Insurance Casualty: | Customer's account | Customer's account | Power Provider's account |
Operation & Maintenance: | Customer's account | Customer's account | Power Provider's account |
Purchase Option: | N/A | Fixed 20% of the purchase price | Fair market value |
Renewal Option: | N/A | Fixed | Fair market value |
Return Option: | N/A | Not available | As per the PPA |
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