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Can Solar Systems Generate Income? - How much is Your Roof Worth?

The Basics of  Power Purchase Agreements (PPA's)

So, how does a roof rental work? The concept of  PPA's is simple; however, know what you're signing on for.  The deal works somewhat like having a vending machine located at your home or business.  You provide the location which doubles as the point of consumption. 

In exchange, you get to buy the energy produced by the system at a rate 10 to 20 percent lower than prevailing utility company rates, rental income for the use of your roof space and possibly, if SREC's (renewable energy credits) are involved, a share of the revenue generated from the system from the sale of the SREC's. That's basically how a Power Purchase Agreement (PPA) works.

The PPA company or entity supplies all the necessary equipment, installs and maintains it without any cost to the site owner.  If the agreement includes a roof rental fee, the site owner may receive a monthly or annual check for the use of the solar system mounting area.

What else can you expect out of the deal besides rental income from your roof? 

Some providers may offer a few extra perks including buying the electricity generated by the system at a discount from the local utility rate. 

What's the catch? 

Just about everything has strings attached and receiving money to rent out your roof is no different.  Pros and cons, here's what you need to know.


If it fits into a long-term strategy without disrupting future planning, a reduced electric bill, rental income and possibly a cut of the profits isn't a bad deal, especially if you have no use for the roof except to keep the weather out.

In today's environment, the PR for using and advocating renewable energy has value.

Buy it for pennies on the dollar.  The option, but not the obligation to buy the system at a future date and transfer ownership at a deep discount to the initial installation price should be built into the contract.


More than likely, the PPA agreement will include limitations as to any changes you can make to the roof or surrounding area.  Anything that changes the output/performance of the system will likely not be allowed  even though you own the property.

Although it's extremely rare that a solar system can damage a roof, make sure you have insurance to cover damages.

As of now it’s a gray area, but there are no income reporting rules.  That could change in the future.

Up front, there has to be a plan for de-commissioning the system after its useful life.  It will cost a considerable amount of money to disassemble and remove the system.  Pricing that today for 20 or 25 years in the future is difficult.

So the million dollar question you want answered is …How much is my roof worth?  Well, that all depends.  Here's a list of variables that will determine how much you can anticipate being offered.


  • Age and type of existing roofing material
  • Orientation (which way it faces) South – Southwest – Southeast
  • Is the roof flat or pitched
  • Is there shading from trees, obstructions on the roof or adjacent buildings
  • Geographical location of the building
  • Square footage available

Remember, just like a casino, the house almost never loses.  The solar provider and its investors are in business to make money.  They're risk factor is pretty low because the economics are designed to have the investment income recaptured very quickly, usually in just a few years.

Because of this, be prepared to go through a rigorous and detailed financial disclosure process that will ensure the investors that you can satisfy the terms of the agreement.

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