Third-Party PPA Calculator

It's the first year in the simulation where the escalating PPA rate becomes higher than the escalating utility rate — the point where the contract you signed to save money starts costing more than doing nothing. It only happens when the PPA escalation percentage you entered is higher than the utility escalation percentage; a result of 0 means that never occurs across your full contract term, which is the typical outcome since PPA escalators are usually set lower than expected utility inflation.

Because panel degradation means later contract years produce less energy than earlier years, a simple average of yearly rates would overweight the low-production years the same as the high-production ones. This calculator instead divides total lifetime cost by total lifetime kWh, so the average reflects what you actually paid per kWh across all the energy the system really delivered.

Degradation reduces how many kWh you buy from the PPA each year, which lowers both your PPA cost and your avoided utility cost proportionally — it doesn't change the rate itself. Since you're saving the difference between two per-kWh rates on fewer kWh over time, degradation slightly shrinks your dollar savings each year even as the rate gap between PPA and utility keeps widening.

The offset percentage only determines how much of your total annual consumption the PPA system actually covers — the remaining consumption is billed entirely at the escalating utility rate, outside the PPA contract. A lower offset percentage means less of your usage benefits from the cheaper PPA rate, which directly reduces total lifetime savings even if the per-kWh rate spread stays the same.