Project
Quote total divided by watts.
From the quote's production estimate. 1,100-1,600 across most of the US.
5 to 40.
Your cost of capital, or what the cash would earn elsewhere.
Your utility
Blended energy plus demand charge cost per kWh the system offsets.
The biggest swing factor. The table below re-runs 0, 2, 4 and 6%.
Buying
Grows 2% a year.
Type what your tax advisor says applies, or 0.
0 for a tax-exempt owner. Credits and depreciation are ignored at 0.
PPA quote
Lease quote
Then you own and run the system.
Result
Questions people ask
Should a business buy solar, sign a PPA or lease?
It depends on tax appetite, cash and how fast your utility rate rises. Buying earns the tax credit and depreciation if you can use them and has the highest long-run return. A PPA or lease needs no cash up front and is often simpler, but the provider keeps the credit and prices it into your rate. This tool puts all three on one set of annual cash flows so you can compare net present value, payback and year-1 cash.
What is the PPA rate at which buying stops being better?
The break-even PPA rate is the starting $/kWh, with your escalator, at which a PPA has the same net present value as buying. If a quote is below it, the PPA is the better deal on these numbers. If it is above, buying is. It moves with the utility escalation you assume, so check the sensitivity table.
Why does the utility escalation matter so much?
Every kWh the system produces is a kWh you do not buy at next year's rate. A fixed-price PPA or buy locks in the cost while the avoided utility price rises, so higher escalation favors the options with less annual outflow relative to savings. The table re-runs the comparison at 0, 2, 4 and 6%.
What happens after the PPA or lease term?
Contracts differ: renew, buy out at fair market value, or remove the system. The tool assumes you buy it out at a percentage of the installed cost that you choose and then run it yourself. Set the buyout to match your contract.
Not decided
Whether you qualify for any tax credit or depreciation, current law and construction-start rules, who may claim the credit under a lease or PPA, state and utility net-metering or demand-charge rules, interconnection, roof condition, insurance, fair market value of an end-of-term buyout, or the accounting treatment of a lease. Take the percentages from your tax advisor and the terms from the contract, and have a professional review any agreement before you sign.
Related tools: the home solar payback calculator, the solar PV bid calculator and the bonus depreciation calculator.