Mortgage Payment Calculator Interest Only Loan

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Solar PPA Savings Calculator

Estimate your savings by switching to a Power Purchase Agreement

Year 1 Savings: $0.00
Year 1 PPA Payment: $0.00
Total Lifetime Savings: $0.00
Average Annual Savings: $0.00

Understanding Your Power Purchase Agreement (PPA)

A Solar Power Purchase Agreement (PPA) is a financial arrangement in which a third-party developer designs, finances, installs, and maintains a solar energy system on a customer's property at little to no upfront cost. Instead of buying the panels, the customer agrees to purchase the energy generated by the system at a fixed per-kWh rate.

How This PPA Calculator Works

This calculator compares the cost of energy you would buy from your utility company against the cost of energy purchased through a PPA over the life of the contract. It accounts for two critical factors that often confuse homeowners:

  • The PPA Escalator: Many PPA contracts include an "escalator" clause, meaning your PPA price per kWh increases by a set percentage (usually 1% to 3%) every year.
  • Utility Rate Inflation: Historically, utility companies increase their rates annually. This calculator defaults to a 3.5% national average, but you can adjust this based on your local utility's history.

Example Calculation

Imagine a home that uses 10,000 kWh per year. If your utility charges $0.20/kWh, your annual bill is $2,000. If a PPA provider offers you a rate of $0.15/kWh with a 0% escalator:

  • Year 1 Savings: ($0.20 – $0.15) × 10,000 = $500.
  • Long Term: As the utility rate rises to $0.28 over 10 years while your PPA stays at $0.15, your annual savings grow significantly.

Key Benefits of a Solar PPA

PPAs are popular because they remove the barriers to entry for solar energy. Benefits include:

  • $0 Down: No significant upfront capital investment is required.
  • Maintenance Free: Because the PPA provider owns the system, they are responsible for all repairs and monitoring.
  • Immediate Savings: Most PPAs are structured to ensure the per-kWh rate is lower than your current utility rate from day one.
  • Predictability: You know exactly what you will pay for power for the next 20-25 years, protecting you against volatile energy market spikes.
function calculatePPASavings() { var annualGen = parseFloat(document.getElementById('annualGeneration').value); var utilRate = parseFloat(document.getElementById('utilityRate').value); var ppaRateStart = parseFloat(document.getElementById('ppaRate').value); var ppaEsc = parseFloat(document.getElementById('ppaEscalator').value) / 100; var utilInf = parseFloat(document.getElementById('utilityInflation').value) / 100; var years = parseInt(document.getElementById('termYears').value); if (isNaN(annualGen) || isNaN(utilRate) || isNaN(ppaRateStart) || isNaN(years)) { alert("Please enter valid numerical values."); return; } var totalPpaCost = 0; var totalUtilCost = 0; var year1Savings = 0; var year1Payment = 0; var currentPpaRate = ppaRateStart; var currentUtilRate = utilRate; for (var i = 0; i < years; i++) { var yearlyPpa = annualGen * currentPpaRate; var yearlyUtil = annualGen * currentUtilRate; if (i === 0) { year1Savings = yearlyUtil – yearlyPpa; year1Payment = yearlyPpa; } totalPpaCost += yearlyPpa; totalUtilCost += yearlyUtil; // Apply escalators for next year currentPpaRate *= (1 + ppaEsc); currentUtilRate *= (1 + utilInf); } var lifetimeSavings = totalUtilCost – totalPpaCost; var avgAnnual = lifetimeSavings / years; // Update UI document.getElementById('year1Savings').innerText = "$" + year1Savings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('year1Payment').innerText = "$" + year1Payment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('lifetimeSavings').innerText = "$" + lifetimeSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('avgAnnualSavings').innerText = "$" + avgAnnual.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('ppaResults').style.display = 'block'; // Smooth scroll to results document.getElementById('ppaResults').scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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