Understanding:
Third party ownership (TPO) in solar refers to a financing arrangement in which a third party company owns and operates a solar energy system installed on a property, and the property owner benefits from the use of the energy generated by the system.
Under a TPO arrangement, the third-party company is responsible for the installation, maintenance, and operation of the solar system, and the property owner agrees to purchase the electricity generated by the system at a predetermined rate. This rate is typically lower than the local utility's retail electricity rate, providing savings to the property owner.
TPO arrangements are often used in situations where the property owner does not want to incur the upfront costs of purchasing and installing a solar system, or does not have the financial resources to do so. TPO arrangements can also provide a solution for tenants who want to benefit from solar energy, but do not own the property.
Downside:
One potential downside of TPO arrangements is that the third-party company owns the solar system and receives the financial benefits associated with any tax incentives or rebates. However, TPO arrangements can still provide a viable option for property owners who want to benefit from solar energy without the upfront costs and ongoing maintenance responsibilities of owning a solar system.
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