Solar PPAs: The State of the Market

Despite opposition from some utilities and state governments, solar Power Purchase Agreements (PPAs), have continued to see a steady increase in adoption, as more states have adopted legislation allowing for easier access to solar financing. In the past few years, holdouts such as Iowa, Georgia and South Carolina have opened their markets, with ongoing dialogue in many other states as local solar industries strive to pass solar-positive bills. 

One of the more recent legal wins for solar PPA financing was in Florida, where the sunshine State ruled in favor of Sunrun, a residential installer, providing solar leases. This could soon lead to bigger wins for businesses and non-profits, as legislature is currently being pushed to abolish a law designating solar lease owners as utility companies. If successful, this campaign could unlock the state to companies such as Sustainable Capital Finance, to provide both commercial and utility-scale PPA financing to off-takers currently lacking affordable options. 

The infographic below shows the current state of the solar market with regards to the legality of PPAs and leasing

Solar PPA and Lease Status by State Info-Graphic

Future Battleground States 

While the number of states supporting PPAs is currently greater than those against, there are still a number that remain in a grey area. Many of these states only allow certain consumer types access to solar financing or have placed cost-prohibitive caps on net metering. While most of these states don’t specifically prohibit PPA financing, their legislation contains complications or roadblocks which prevents mass adoption of solar PPA financing. 

One such state is Virginia, thought to be a virtual gold mine for rooftop solar due to the vast number of energy-consuming data centers located in the northern part of the state. While the solar industry has been pushing for reform, utility-backed laws limiting the use of net metering and financing have greatly slowed solar investment in the state. A comprehensive reform bill was put forward recently that would remove a number of policy barriers preventing private investment and allow for better access to distributed solar. Details on the bill can be read here

SCF and the Future of PPA Financing 

Our experts have worked with utilities and off-takers in numerous states and have the experience to circumvent many potential roadblocks in the PPA process. While we don’t currently support PPAs in states with prohibitive legislation, we are actively expanding the number of states we operate in as new laws are passed. 

SCF is actively acquiring commercial and utility-scale solar projects from developers and EPCs at various stages of development. Contact us now to learn more. 

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