Solar Power System Financing Options
Residential and commercial solar power systems offer significant financial benefits, especially in the face of rising time-of-use electricity rates. Many system owners see savings of 75% or more on their electricity bills.
In order to see those savings, you must first invest in a solar energy system for your home. Thankfully, there are many low-cost financing options available to help cover the cost of buying and installing a system.
SunPower Solar Loan
SunPower is one of the largest and oldest solar panel manufacturers in the country. In addition, they make some of the best solar panels anywhere, which is why we’re proud to be a SunPower Elite Dealer and Commercial Dealer.
To help cover the cost of their systems, SunPower offers a SunPower Solar Loan, with generous lending and payback options. This financing option is most popular with our customers. One of the big attractions is that the loan is tied to the solar system hardware. You don’t need equity in your home in order to receive the loan. This provides a great deal of peace of mind, especially for those who have just purchased a home.
What do you need to know?
- SunPower offers the industry’s highest loan limit.
- The first payment won’t be due until after the system is installed
- Pay off the loan in full at any time, with no penalties.
- If you sell your home, the loan is transferrable to the buyer.
For those buying a SunPower solar power system, SunPower’s in-house financing option is a great choice.
The terms and rates of the SunPower Solar Loan range from 10-20 years and have interest rates ranging from 3.99% to 5.49%*
*If a homeowner elects to pay by check, rates will increase by .25%
PACE Financing – Property-Assessed Clean Energy
Property Assessed Clean Energy (PACE) is a financing program funded via private capital that aims to make solar power systems more affordable for homeowners, businesses, and industrial operations.
The program is structured so that repayment is rolled into property tax payments, typically over a period of 20 years. There is no credit check necessary, as PACE is tied directly to your home or commercial building. Because of this, the repayment obligation transfers with the property. However, if you are planning on selling your property before you finish paying for your system, the buyer may require that you settle all liens beforehand.
There are a variety of PACE programs, including CaliforniaFIRST, HERO, mPOWER, Ygrene, and more. Capital City Solar can help you identify the best option for your home or business.
Solar Power System Leasing
Just as it’s possible to lease a car rather than buy, there are many solar power system leasing programs available. As with financing, leases typically have a 20-year term, and the payment obligation can be easily transferred if you sell your home or business, or you can choose to pay it off early with no penalty.
If your system underperforms, you’ll be compensated accordingly, but you won’t be subject to any increased costs if your system overperforms.
One of the biggest benefits of leasing is that you start enjoying energy savings immediately, with no money out of pocket up front. This is an especially good option for those that have no use for a tax credit.
When the 20-year term ends, the system will be removed at no cost, or you can purchase the system at fair market value. Due to the length of the agreement, leasing isn’t best for families that may want to add additional panels in the future.
Power Purchase Agreements (PPA)
Power Purchase Agreements, commonly referred to as PPAs, are a means of allowing you to enjoy many of the benefits of having a solar power system, without actually buying one.
In a PPA, a third party covers the cost of a solar power system and its installation on your property, and covers the cost of operating and maintaining it. In turn, you pay for the energy produced by the system, but at a price lower than what your utility company charges for power off the grid.
Whereas a lease agreement has a fixed monthly cost, your PPA payment will vary month to month, as production varies with seasonal changes. Thus, you’ll pay more in the summer when the system produces more energy, and less in the winter when generation is reduced.
PPAs vary greatly, with terms ranging from 10 to 25 years. Bear in mind, if you choose a PPA, only the owner of the system is eligible for any related financial and tax incentives.
Home Equity Line of Credit (HELOC)
HELOCs have long existed as an alternative (or supplement) to traditional mortgages. The flexibility of HELOCs make them a good choice for covering the cost of a solar power system.
There are many financial incentives for choosing a HELOC. You can write off the interest on your taxes, lowering your federal tax liability. In addition, the 30% federal tax credit goes straight to you, rather than paying down a traditional loan.
The typical return on investment for buying a solar power system using a HELOC is 5 to 7 years.
If you would like to learn more about what financing options are available for a residential or commercial solar power solution, contact Capital City Solar today by calling 916-782-3333, or filling out our contact form. And be sure to refer your friends as well! We offer customers a $250 referral person for each referred friend or family member who purchases a solar power system from Capital City Solar.