Is a solar PPA a good deal?

When the rate stays below your utility rate for most of the term. Enter the offer above and run the utility growth at 0% and at your own estimate: if the PPA only wins at high growth, it is a bet.

What is a typical PPA escalator?

Contracts commonly include a fixed yearly increase. Read yours: it is printed on the pricing page. Even small escalators compound to large increases over 20 to 25 years.

Do I get the federal tax credit with a PPA?

No. The PPA provider owns the system. And the §25D homeowner credit ended for systems placed in service after 31 December 2025.

What is the difference between a PPA and a lease?

A lease charges a fixed monthly payment; a PPA charges per kWh produced. See lease vs PPA.

HyreSolar tools

Solar PPA calculator

For homeowners offered a power purchase agreement who want to see the rate and its escalator against the utility over the whole term.

Checked September 3, 2026. Data as of October 22, 2026. HyreSolar sells and installs nothing.

This solar PPA calculator gives an estimate from your own numbers in under a minute, with every assumption listed under the result.

A PPA saves money only while its rate stays below the utility’s, and the escalator decides how long that lasts.

A 14¢ PPA rising 2.9% a year saves $444 in year one against a 18.44¢ utility rate on 10,000 kWh, but passes the utility in year 11 if utility prices stay flat, so over 25 years it costs $3,681 more than the utility.

Under a PPA you pay for the electricity the panels make, per kilowatt-hour, rather than a fixed monthly lease payment. The rate usually starts below the utility’s, which is how it is sold.

The escalator, a fixed yearly increase written into the contract, is what turns a good first year into an expensive last decade: at 2.9% the rate roughly doubles over 25 years.

Whether that is a bargain depends entirely on what utility prices do, and nobody can promise that number.

That is why utility price growth is an input, not a default we chose for you. Run it flat, then at the rate you think plausible, and see whether the PPA still wins.

If it only wins when utility prices climb fast, you are betting on those increases. The 18.44¢ default is the US average residential price from the EIA (May 2026 data); replace it with your own blended rate from a bill.

PPA vs the utility, every year of the term

The same kilowatt-hours priced both ways.

Example values The filled-in numbers are an example, not your home. Type over them with your own.

— Over the term

— Year one

— PPA passes the utility in

— PPA rate at the end

How this result was worked out

Working it out from the numbers above.

Fixed utility charges are paid either way and are left out.

HyreSolar does not sell PPAs or leases.

What the result means

The term total is the number that matters. It compares every kilowatt-hour the system makes, priced both ways, across the contract.

The crossover year is when the PPA becomes the more expensive way to buy power. From then on every year costs you more than staying with the utility for those kWh.

Fixed utility charges are left out because you pay them with or without a PPA.

How to use it

Where each input comes from, so nothing is a guess.

1. Enter the PPA rate and escalator

Cents per kWh in year one, and the yearly increase.

Where to find it: The pricing page of the PPA offer. Our escalator calculator shows the escalator on its own.

2. Enter your utility rate

Blended: whole bill ÷ whole kWh, so delivery is included.

Where to find it: Your bill. Default is the EIA national average.

3. Choose a utility growth rate

Your assumption. Run several.

Where to find it: Your bill history over several years is the best guide you have.

4. Enter expected production

kWh in year one from the offer.

Where to find it: The PPA offer’s production estimate.

Assumptions

1
Production falls each year
By the degradation rate you enter (default 0.5%/yr, the median finding in Jordan, Kurtz, VanSant and Newmiller 2016). The same kWh are priced both ways.
2
PPA rate rises by its escalator
Year y rate = year-one rate × (1 + escalator)^(y − 1).
3
Utility rate rises by your assumption
Default flat (0%), so the comparison is not built on a forecast.

The formula, in full. For each year y: kWh_y = kWh × (1 − degradation)^y; PPA cost = kWh_y × PPA × (1 + PPA escalator)^y; utility cost = kWh_y × utility × (1 + utility growth)^y. Saving = Σ utility cost − Σ PPA cost.

How the answer moves

One input changed at a time from the base case. Every figure is computed by the calculator on this page.

Situation	Year one	Crossover	25-year result
Base case14¢ PPA +2.9%/yr, utility flat	$444 saved	Year 11	$3,681 more than the utility
Utility rises 2%/yr	$444 saved	Never, on these inputs	$8,248 saved
Utility rises 4%/yr	$444 saved	Never, on these inputs	$24,515 saved
No PPA escalator	$444 saved	Never, on these inputs	$10,459 saved
PPA escalator 3.9%	$444 saved	Year 9	$10,234 more than the utility
PPA at 17¢, 0% escalator	$144 saved	Never, on these inputs	$3,392 saved

The escalator and your utility growth assumption decide the answer between them. A PPA with no escalator is far less sensitive to what the utility does.

Next step

Compare the PPA with buying on PPA vs the utility rate and lease vs PPA, and price ownership with the installation cost guide. Check the contract with the contract red-flag checker.

If you want an owned-system quote to compare against, send your result to an installer with the form under the calculator.

Embed this calculator

Free to use on any site, including news and installer pages. Paste this where you want the calculator to appear. Keep the credit line: it is the only condition.

<iframe src="https://hyresolar.com/tools/ppa-rate-calculator/#calc" title="Solar PPA calculator by HyreSolar" width="100%" height="900" loading="lazy" style="border:0"></iframe>
<p><a href="https://hyresolar.com/tools/ppa-rate-calculator/">Solar PPA calculator</a> by HyreSolar</p>

What this calculator leaves out

The result is a planning estimate. A real proposal accounts for these; this page does not.

Utility growth is your assumption, not a forecast.
Assumes a flat utility rate per kWh.
Time-of-use and tiered rates change the value of each kWh.
Does not include end-of-term options (renewal, purchase, removal).
Under net billing, exported kWh may be worth less than the utility rate; this tool prices every kWh at the utility rate.

Questions this calculator answers

Is a solar PPA a good deal?: When the rate stays below your utility rate for most of the term. Enter the offer above and run the utility growth at 0% and at your own estimate: if the PPA only wins at high growth, it is a bet.
What is a typical PPA escalator?: Contracts commonly include a fixed yearly increase. Read yours: it is printed on the pricing page. Even small escalators compound to large increases over 20 to 25 years.
Do I get the federal tax credit with a PPA?: No. The PPA provider owns the system. And the §25D homeowner credit ended for systems placed in service after 31 December 2025.
What is the difference between a PPA and a lease?: A lease charges a fixed monthly payment; a PPA charges per kWh produced. See lease vs PPA.

Sources and methodology

Figures dated October 22, 2026. Last reviewed September 3, 2026 by the HyreSolar research desk, which writes and checks every tool on this site.

Electric Power Monthly, Table 5.6.A, residential average price (US Energy Information Administration, retrieved August 6, 2026). 18.44¢/kWh, May 2026 data: the default utility rate.
Compendium of photovoltaic degradation rates (Jordan et al., Progress in Photovoltaics (record held by OSTI), retrieved September 5, 2026).
Residential Clean Energy Credit (§25D) (Internal Revenue Service, retrieved October 22, 2026).

Related solar tools

Lease escalator calculator What a yearly payment increase turns the lease payment into by the final year.
Lease vs buy calculator Twenty-five years of lease payments against the cash or financed price.
Contract red-flag checker Counts the expensive clauses to ask about before you sign.

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