This ownership option is not to be confused with a long-term contract (also called a power purchase agreement) such as the microFIT Contract available in Ontario. This ownership options refers to an agreement between the solar vendor and the customer for the sale and purchase of electricity generated by the solar PV system.

Under this ownership option a vendor installs the solar system on your building (or property), generally at no cost to you. The solar vendor continues to own and operate the solar system throughout the term of your agreement and you purchase the electricity generated by that system rather than buying it from your local electric utility. The "power purchase agreement" is the agreement signed between you and the solar vendor which establishes the terms under which you will buy the electricity generated by the solar system.

Generally, solar vendors will allow customers to pay off the solar system in one lump sum payment and take immediate ownership of the equipment, should they wish. Ask your solar vendor if this is an option when you are doing your research.

This type of ownership option is most common in jurisdictions with net metering programs. We will cover the main ways customers are compensated for their generated electricity (including net metering programs) in Section 4, below.