When you decide to go solar, your first major decision isn’t actually about choosing batteries or panels. Instead, it is about how you will pay for the system. Over the last decade, solar financing has evolved, leaving homeowners with three primary paths: a Power Purchase Agreement (PPA), a Prepaid PPA, or a Cash Purchase.
Each of these options involves specific tradeoffs that impact your long-term savings, your level of ownership, and your financial flexibility. Choosing the right one requires looking beyond the lowest upfront price to find the solution that aligns with your specific financial goals.
Below, we break down the top three ways to get solar, who each option is best for, and the key pros and cons homeowners should consider.
1. Power Purchase Agreement (PPA)
A Power Purchase Agreement (PPA) is designed for homeowners who want to switch to solar with little to no upfront cost. In this model, you do not own the solar system; instead, a third-party provider installs and maintains the equipment on your roof. You simply agree to buy the electricity the system generates at a fixed rate, which is typically lower than your current utility costs.
At OC Solar, this is offered via the OC Solar Energy Agreement, which provides immediate savings and allows you to bundle in roofing or battery storage.
Pros of a PPA:
- No upfront cost
- Lower initial electricity rates compared to the utility
- Maintenance and monitoring included
Cons of a PPA:
- You do not own the system
- No eligibility for the federal solar tax credit
- Long-term contracts, often 20 to 25 years
- Some plans include a small, predefined annual rate adjustment
Best for: Homeowners who prioritize simplicity, predictable early savings, and low upfront costs.
2. Prepaid PPA
The Prepaid PPA is a hybrid model that bridges the gap between a traditional PPA and full ownership. Instead of making monthly payments, you pay a one-time lump sum upfront for all the electricity the system is expected to produce over its 20-to-25-year term. After 6 years, you obtain ownership of the system.
The OC Solar Prepaid Plan allows homeowners to receive the 30% credit upfront without a credit check or property liens. While you still do not own the system, prepaying allows you to lock in your energy costs at a deeply discounted rate.
Pros of a Prepaid PPA:
- Significant long-term savings compared to a standard PPA
- No monthly solar bill
- Maintenance and system performance guarantees are included
- Protection against utility rate increases
Cons of a Prepaid PPA:
- Large upfront payment
- No system ownership
- No access to the federal tax credit
- Less flexibility if you sell your home
Best for: Homeowners who want long-term price certainty and strong savings without the responsibilities of full ownership.
3. Cash Purchase
A cash purchase means you own the solar system outright from the day it is installed. While this requires the highest initial investment, it also provides the most substantial long-term financial returns.
Pros of a Cash Purchase:
- Full system ownership
- Eligibility for tax credits and incentives
- Higher home value
- No ongoing solar payments
Cons of a Cash Purchase:
- Highest upfront cost
- Responsibility for maintenance, depending on installer warranties
Best for: Homeowners who have the available capital and want to maximize their cumulative savings and control.
Which Solar Option Is Right for You?
There is no single “best” way to go solar; the right choice depends entirely on your home, your energy usage, and your long-term financial goals. Too often, homeowners focus only on the monthly payment and overlook how that choice will impact them over the next 25 years.
At OC Solar, we remove the guesswork by providing side-by-side comparisons using real data from your home. Whether you prefer the low upfront cost of the OC Solar Energy Agreement or the deep savings of the OC Solar Prepaid Plan, we provide the clarity you need to make an informed decision.
Get a custom solar quote from OC Solar today and see exactly what your home qualifies for—and which option actually saves you the most!