PandaDoc’s user-friendly platform allows for easy customization, collaboration, and electronic signing. We are making it a convenient and efficient solution for crafting solar panel contracts that meet the specific needs of your project while minimizing administrative burdens and legal uncertainties.
Use our structured framework for defining terms, responsibilities, and financial arrangements. Fill in the blanks or customize the template to create the right type of contract for your renewable energy project.
Types of Solar Panel Contracts
There are different types of solar panel agreements and proposals available. The one you use will depend on a few different factors. These factors include whether you lease or buy solar panels and whether the contract is for a home, business, or even a large development.
Power Purchase Agreements (PPAs)
A power purchase agreement or PPA is similar to a solar lease agreement. The biggest difference between a PPA and a lease agreement is that the client is charged a fixed rate per kWh for the power produced in a PPA contract. Using a power purchase agreement template, you outline the responsibilities of each party before, during, and after the installation. You also include other important information, such as the expected amount of kWh generated in a month, the cost per kWh, and more.
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Lease Agreements
A solar power lease agreement is a good option if you want to start using solar energy but don’t have the initial capital to install the system. In these cases, it’s the company’s responsibility to design, install, and maintain the entire system. The client will then pay a fixed monthly rate for the power produced by the system. However, the panels will remain the property of the company, even though they’re installed on the client’s property. This type of solar panels contract template is ideal when setting up a lease for a fixed monthly rate in exchange for the power produced.
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Development Agreements
Solar development agreements are used when an individual or business acts as a developer on a solar energy efficiency project. These agreement templates enable the developer to outline the technologies used in the project. Apart from this, they’ll also be able to propose service providers, optimize returns on investment, and provide for any other project management services required to complete the development project.
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Solar Service Contracts
Service contracts are an agreement between two parties, usually the home or business owner, and the provider, an installation or maintenance company. It outlines the scope of service offered, financial aspects that the client is responsible for, along with estimated cost savings so that the client knows the benefits of the service.
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Solar Proposals
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What Are the Key Elements of a Solar Panel Contract?
While there are many different types of solar panel contracts, all of them contain a few key elements. Let’s take a look at what elements a solar panels contract should include.
Pricing and Payment Terms
This section should cover all of the financial terms related to the contract. Your contract may include any of the following:
- Summary of upfront costs
- Cost of materials, labor, and installation
- Any costs for permits and inspections
- Estimated cost savings
- Annual solar output
- How to pay for the system
- Any applicable rates, i.e., fixed or flexible, monthly or once-off
System Specifications and Equipment Details
This section should outline all the specifications of your solar system. It should include the following:
- number of panels installed
- the type of system installed
- the specifications of the inverter
- the manufacturer’s warranty for panels and inverter
- Panel wattage
- Battery storage (if applicable)
Maintenance and Warranty Provisions
This section should cover all the warranty provisions, such as what happens if a solar panel breaks during installation. Who’s responsible for the costs if not covered under the warranty? This section should also be used to make it clear who’s responsible for maintenance and repairs after installation.
Performance Guarantees and Monitoring
Your solar panels’ contract should estimate how much energy will be produced and what savings the client can expect. This section of the agreement should clearly outline how the system’s performance will be monitored and what guarantees are given.
Solar Contracts for Businesses and Commercial Properties
Solar power has many benefits for businesses and commercial properties, such as
- lower rates on electricity,
- incentives from states for using renewable energy,
- tax breaks for using clean energy.
The contracts for businesses and commercial properties aren’t different from the ones used for homeowners. However, they may vary in complexity as these properties have a more complex setup and different needs. However, you can still use a template to help get the process started, as the basic terms remain the same.
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FAQ
The key components of a solar panel agreement remain the same, even if the type of contract varies slightly in its use. Basic solar power agreements should include at least the following sections: Overview of the system Financial overview Overview of the installation Energy production and savings Billing overview Warranty and maintenance information Legal provisions
The most commonly used types of contracts for solar panel installation include power purchase agreements (PPAs), lease agreements, and outright purchase and installation agreements. These are the contracts used most frequently for individual homes, businesses, and even commercial developments.
There are several legal considerations to be aware of when entering into a solar panels contract. You should ensure that you understand all the legal terms in your agreement, particularly the terms surrounding liability, insurance, ownership, termination, regulatory compliance in your state, and taxes.
