3rd Party Solar PV Power Purchase Agreement (PPA)
www.dsireusa.org / June 2019

NV: With system
size limitations

CO: With system
size limitations

VA: Limited capacity; limited to
certain utilities & customer types
DC

AR: Limited to
tax-exempt
entities*

AZ: Limited to
certain sectors

FL, LA, MS, NC, SC: Solar
leases explicitly allowed

TX: With system
size limitations

At Least 28 States
U.S. Territories
PR

Guam

USVI

NMI

Apparently disallowed by state or otherwise restricted by legal barriers
Authorized by state or otherwise currently in use, at least in certain jurisdictions
Status unclear or unknown

+ Washington DC and
Puerto Rico Authorize or
Allow 3rd Party Power
Purchase Agreements for
Solar PV
* Commission rules implementing recent statutory
changes have not yet been adopted

 Important Information Regarding 3rd-Party Solar PPAs
State authorization of 3rd-party solar PV PPAs allows residential customers to purchase electricity
generated by solar panels on their roof (usually at a price lower than the retail rate of electricity)
from a third party that owns the PV system. Some states that limit or prohibit 3rd-party solar PV
PPAs explicitly allow for residential solar leasing arrangements.
Legal authorization for residential 3rd-party solar PV PPA arrangements usually lies in the
definition of a “utility” in state statutes, regulations or case law; in state regulatory commission
decisions or orders; and/or in rules and guidelines for state incentive programs.
States that have authorized the use of 3rd-party PPAs may not have done so in every jurisdiction.
For example, municipal utilities may not allow 3rd-party PPAs in their territories even though they
are allowed or in use in the state’s investor-owned utility (IOU) territories.
Though a 3rd-party PPA provider may not be subject to the same regulations as utilities, additional
licensing requirements may still apply.
This map does not represent interstate 3rd-party solar PV PPA authorizations relevant to large
generators. In states that limit or prohibit intrastate PPAs, interstate PPAs for wholesale electricity
market sales may be allowed by federal laws in areas under the jurisdiction of regional, multistate transmission organization authorities.
This map and information is provided as a public service and does not constitute legal advice.
Seek qualified legal expertise before making binding financial decisions related to a 3rd-party
PPA.

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Authorities/References

Alabama: AL code § 37-14-32
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Arizona: ACC Decision 71795, Docket E-20690A-09-0346 (limited
to schools, governments or other non-profit entities)
Arkansas: S.B. 145 (2019) (limited to Solar Services Agreements ●
qualifying for safe harbor protection under 26 U.S.C. 7701(e)(3)(A) ●
for tax-exempt entities) and explicitly allows solar leasing. Note:
Commission rules implementing S.B. 145 have not yet been
●
adopted
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California: Cal. Pub. Util. Code § 218, § 2868
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Colorado: S.B. 09-051; PUC Decision C09-0990, Docket No.
08R-424E (2009) (limited to systems generating no more than
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120% of the average annual electricity consumption)
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Connecticut: Clean Energy Finance and Investment Authority
D.C.: REIP Program; PSC Order 15837 (2010)
Delaware: S.B. 266 and S.B. 267 (2010)
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Florida: PSC Decision: Docket 860725-EU; Order 17009 (1987); ●
PSC declaratory rulings have permitted residential solar leasing
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Georgia: H.B. 57 (2015)
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Hawaii: S.B. 704 (2011)
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Illinois: 220 ILCS 5/3-105, 16-102; 83 Ill. Adm. Code, Part 465
Iowa: Iowa Supreme Court, No. 13-0642 (2014) (the Iowa
●
Supreme Court’s decision overruled an earlier IUB determination ●
that a local solar company who proposed a 3rd-party PPA would be
a “public utility” under Iowa law)
Kansas: KS Department of Revenue Opinion O-2016-001
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Kentucky: KRS 278.010 (3)
Louisiana: La. R.S. 45:121
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Maryland: H.B. 1057 (2009)
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Maine: Title 35-A section 3202
Massachusetts: 220 CMR 18.00
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Michigan: 2008 Public Act 286; PSC Order Docket U-15787
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Mississippi: Any entity selling electricity is subject to public utility
regulations stipulated in MS code § 77-3-3, but MS net metering
rules explicitly allow leasing of solar equipment.
Nevada: NRS 704.021 (A.B. 186, 2009); PUC Orders 07-06024
New Hampshire: PUC 902.03; PUC Docket DE 10-212 (letter
1/31/12)
New Jersey: N.J. Stat. 48:3-51; N.J.A.C. §14:8-4.1 et seq.
New Mexico: H.B. 181 and S.B. 190 (2010)
and 07-06027 (limited to systems generating no more than 150%
of the average annual electricity consumption)
New York: NY CLS Public Service § 2.13
North Carolina: General Statutes § 62‐3(23) prohibits 3rd Party
Sales, but H.B. 589 (2017) explicitly allows leasing of solar
equipment
Ohio: PUC Order 06-653-EL-ORD (11/05/2008)
Oklahoma: Attorney General Opinion 2018-5
Oregon: PUC Order, Docket 08-388; O.R.S §757.005
Pennsylvania: PUC Order, Docket M-2011-2249441
Puerto Rico: No policy reference available; based on news reports
and articles
Rhode Island: R.I. Gen. Laws § 39-26.4
South Carolina: SC Code Section 58-27-2610(E) and Section 5827-2630(A)(9) arising from S.B. 1189 (2014) prohibit 3rd Party
Sales, but S.B. 1189 explicitly allows leasing of solar equipment
Texas: S.B. 981 (2011) (limited to systems generating electricity
no more than the average annual electricity consumption)
Utah: H.B. 244 (2016); Title 54 Chapter 2 )(1)(19)
Vermont: No policy reference available, based upon news reports
and communications
Virginia: H.B. 2390 (2017); S.B. 1769 (2019)
West Virginia: WV Code §24-2-1