• Solar leases: Under a solar lease, the customer does not purchase power from a third party but simply leases equipment and receives the power generated by that equipment. This solution has been used in Florida, which does not allow the third-party PPA model. Although it avoids the retail sale of electricity, the solar lease model creates challenges for the use of the federal tax credit and accelerated depreciation.
  • Utilities as Contractual Intermediaries: A utility may act as a contractual intermediary. Under this arrangement, the third-party owner sells power from the solar PV system to the utility, which, in turn, sells the power back to the site host/end-user.
  • Standardized Contract Language: Standardized third-party PPA contract language protects customers and reduces the likelihood the PUC will disallow the third-party PPA model or require future regulation.
  • Utility Ownership: Utilities that own solar PV systems sited on customers’ properties could take the federal investment tax credit (ITC) to reduce the capital costs of owning solar PV. However, this model is not as market oriented as others and could exclude third-party solar developers from the utility service territory.
  • CREBs: For states and municipalities that want to install solar PV on government property, clean renewable energy bonds (CREBs)2 offer an alternative financing mechanism to the third-party PPA model. However, some projects may be too large to qualify and project owners had to apply by August 2009 to secure a CREBs allocation.
  • Waived Monopoly Powers: The state PUC and utility may work together to jointly waive the monopoly power rights of the incumbent utility. While this solution is not typical and less feasible than other alternatives, it was applied in Colorado until legislation was passed that replaced this arrangement. With consent from the PUC, the monopoly utility allowed projects financed under the third-party PPA model only when the projects provided renewable energy certificates (RECs) to the utility.

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