Why Solar?

Solar systems are expensive – running from a national average of $24,000 to over $100,000 in some parts of California. The price is determined by a number of different variables. A few examples would be the amount of sun the system will be receiving, the number of additional upgrades that must be done to the roof (or carport) to the quality of the equipment be used, and the amount of shade during the course of the year. However, the goal of solar system design is to always make sure that the cost of solar is less than staying with the utility company.

Paying cash for a solar system is a worthwhile investment, as the ROI can be huge. The calculation is not whether you get your money back, rather it is do you save more money over the course of time.

With this in mind, most systems will have paid for themselves within less than a decade.

However, it may make more sense to save and invest that money elsewhere – or perhaps those kinds of funds are not currently available. To help you, we have several different financing options. There can be a lot of mystery around the different options, so we’d like to help you find the best solution. 

Below is a brief overview – along with benefits and considerations for each option.

Our Plans

Leases

–When solar began growing from a niche market into a generally accepted product, the first financing option that appeared was the Solar Lease. During the Great Recession, many people wanted the benefits of ownership, but did not want to take on the debt.

–A Lease is just that – a lease. You pay a fixed price for use of the system. You have the option of slightly increasing annual payments so as to take advantage of inflation to see the most savings. The normal length is 20 years. At the end of the Lease there can be a renewal, a buy out option, or an option to simply have the company remove it from your property. During the term of the Lease the leasing company is responsible for the equipment and provide a production guarantee.

–However, because you don’t own the system, and because it is designed for your electricity consumption patterns, you will not be able add the value of the equipment to your home’s equity.

Power Purchase Agreements (PPAs)

–This popular form of solar financing appeared soon after the lease.

–A Power Purchase Agreement is easy to understand – you already have one with your utility company. You agree to purchase the electricity produced by the system. The advantage can be that during the winter, when there is less sunlight and less electricity demand, you pay less.

–Just like with a Lease, you do not own the system, so can not add it to the value of your home, but the company that does own it is responsible for both maintaining the system and for providing a production guarantee.

Loans

–In the last couple of years, Solar Loans have emerged as a preferred option.

–A solar loan often requires paying the Federal Tax Credit back to the loan company within a time frame of a year to a year and a half.

–Solar loans do not have pre-payment penalties, can be paid down faster, and do add to the equity of your home.

–Most loans are just like auto loans in the sense that you are responsible for maintaining the system, but with no moving parts, there isn’t much that can go wrong. They also do not provide a production guarantee.

–Loans do not typically have an annual escalator, and if one does – take a serious look at the fine print. These loans often have a balloon payment at the end of the term.

–Loans typically have terms of 12, 20, or even 30 years.

Let Us Help

All these options can be confusing. We specialize in helping you find the best option for you. What is important to us if you are financing is to make sure that your switch to solar is an amazing experience and also results in you saving money on a monthly basis and over the life of the system.