a man reading a solar power purchasing agreement
ComplianceFinanceMarch 03, 2017

Protecting your assets in a solar power purchase agreement

A solar service provider’s area of expertise is putting in clean, efficient solar power systems. You know every nut and bolt, the makeup and capacity of every panel, and how to put the system in place the right way the first time. You hire the best people and install the best equipment.

In a lease or a Power Purchase Agreement (PPA), you own the equipment and the consumer buys the power generated from you. This means you are not selling or leasing the equipment to your customer, merely the electricity produced from the panels you installed on their property. So there is no lien and you do not need to file a UCC-1. Which means if the consumer goes bankrupt or encounters some other difficulty, you can just go over and pick up the equipment, right?

Not so fast. Maybe that’s the case…or maybe it isn’t. It all depends.

How can you protect yourself and your business in this instance? You should check your agreement to see if the contract allows you to secure the equipment.

Even if you have no lien, you still may want to file a UCC-1 in the local county (where the PPA is in effect) for notice purposes only. While this is not a lien, it does serve to notify others of your agreement for due diligence purposes. If the homeowner loses the house or the business owner loses the business during the course of the PPA, your interests in your equipment are protected.

Are you concerned about securing your assets and maintaining your customer relationships at the same time? Be sure to read how you can manage both at the same time.

Suzie Neff of Wolters Kluwer Lien Solutions
Market Segment Specialist

Suzie Neff is a Market Segment Specialist for Wolters Kluwer Lien Solutions. She has more than 15 years of experience helping customers build, review, and improve their lien portfolio.