Policy Profile

Third-party Financing

Policy description:

Traditional purchases of solar systems require large up-front expenditures. Any incentives for such purchases are frequently tax credits, an incentive that is not captured until taxes are submitted – and then only if the customer has sufficient tax liability. Third party ownership attempts to address affordability by allowing a system to be purchased by a third party with the generation sold over time to the customer – offsetting the power purchased from a utility. By doing this, the third party can monetize the tax credits, capitalize on commercial benefits like depreciation, and take advantage of large scale financing at low rates to procure systems at a very low cost – passing on the savings to the consumer in the form of low price per kilowatt hour (kWh) rates that are comparable, and often lower, than established utility rates.Third party financing has proven very popular with customers in the states that have implemented these policies. For more information, see the full policy brief.

Download Full Policy Brief View Policy Component Questions

  1. Are third party leases allowed in the state?
  2. Are third party PPAs allowed in the state?
  3. Are all sectors allowed to enter into third party contracts?
  4. Are systems of all sizes allowed to be financed through third party contracts?