Solar - Cost and Financing


Energy Star loan

Leasing: - done reading - done reading - done reading - done reading - done reading

Tax Credit: - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - environmental cost - done reading - loan can be less than lease - 5 things to consider before installing solar panels - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading

FHA PowerSaver loan

HELOC: home equity line of credit
Buying with cash
FHA Loan
Energy Improvement Mortgages (EIMs).

Check with your local banks and credit unions as they may offer renewable energy loans for less than the prime rate. Also consider that mortgage loans and home equity loans can offer several advantages: longer terms, lower interest rates than conventional bank loans, and tax-deductible interest.

PACE: - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading

The advantages of this property assessment financing include the fact that a homeowner may now finance energy efficiency improvements to their property thus lowering their energy costs in the short term, without concern for the 10- to 15-year return on investment that such improvements require. This is because the financing is attached as a tax assessment to the property, rather than the homeowner. So if the homeowner moves on in the traditional 5- to 7-year time frame, the additional financing is passed on to the new homeowner who continues to receive the lower energy costs. Additionally, with the current strict mortgage underwriting that does preclude many borrowers from qualifying, this PACE financing can be done with no income documentation.

The disadvantage is the shorter amortization and higher interest rate offered in such programs. Current programs offer 7 to 8% interest rates with a 15 to 20 year amortization vs. 30 year mortgage currently at 5.0% or below. As a result, the average $25,000 energy upgrade or retrofit to a home would cost the homeowner 7.5% 15-year amortization ($231.00 per month) compared to 5.0% 30-year amortization ($136.00 per month) for that $25,000 figure.

This difference is assuming that the homeowner qualifies for a complete refinance of their home to secure that low 5.0% rate. If the PACE financing is compared to the HELOCs or second loan, there is little disadvantage in the monthly payment. However, when the homeowner is ready to sell, will that additional $231 per month lien be well received by the next homeowner?

If the homeowner can qualify for today’s low 30-year rates on a refinance, I would recommend a cash out refinance, FHA or Conventional in order to secure the funding for the energy upgrade and the additional discounts offered by lenders for energy efficient upgrades. If they cannot meet the income or credit score requirements in today’s market, the PACE financing provides the Californian homeowner with an excellent solution to decreasing their energy costs while meeting the CEC’s goals of increasing energy efficiency in California. With all the tax incentives and other programs available, the choice is up to the homeowner who wants to reduce their energy costs now.

PACE is a good option when interest rate is low.

Solar customers likewise may have the option to finance their solar systems through their local governments. Local governments can create property tax finance districts to issue loans for energy efficiency and renewable energy such as solar PV systems. PACE allows local governments to provide low-cost, 20-year loans to eligible property owners seeking to install these technologies. The solar customer then pays more on the annual property tax bill to repay the loan. The loans are permanently fixed to real property, so that residents need not worry about their system's break-even point and can pass the loan payments on to subsequent buyers of the property.

The advantages for homeowners are that the city can borrow money at a lower interest rate than an individual can and that the tax program would stay with the house if the homeowner sells.

On a typical $22,000 solar energy system, residents would pay about $180 a month, based on a 6.75 interest rate, after state and federal rebates are issued. At some point the homeowner would save more on their electricity bill than they're spending on the solar tax, if energy rates continue to climb.

Luckily for us, both federal and state governments are encouraging the use of alternative and renewable energy sources. They offer a wide range of financial incentives to businesses investing solar, wind, and other sustainable energy projects. These incentives are drastically improving the cost effectiveness of these projects by lowering upfront costs and reducing a company’s tax burden. The federal government is offering a 30% corporate investment tax credit (ITC). It has no cap and is determined by the total installation cost. If your business doesn’t have an appetite for the tax credit then you may choose to receive the 30% in the form of a grant from the National Treasury. Another major federal program is the Modified Accelerated Cost-Recovery System (MACRS), which allows companies to recover their investments in solar energy systems (and other renewable energy technologies) through an accelerated depreciation schedule. The program allows for a 5-year schedule for most types of solar, including solar photovoltaics (PV). In addition, 2008 and 2009’s federal stimulus legislation includes an additional, one-time 50% bonus depreciation for systems installed in 2009 and 2010. Looking from a tax perspective, MACRS can facilitate the financing of a solar energy system. Many state governments also extend tax credits to businesses.

OBR: - done reading - done reading - printed - printed - printed - printed

Since the obligation to pay is attached to the meter and not individual customers, there is lower risk to the customer to participate. There are also typically no liens on the property, and for many programs, there are no credit checks.

Instead of displaying the charge on the bill, can we display it as a discount instead?

Who is responsible for the maintenance (inverter replacement) if OBR is used, especially in a rental property?

With an OBR, after the loan is paid in full, who own the system? How much will the electricity bill be for the new renters after the OBR is paid in full? Who will pay for the cost of re-installation if the roof needs to be replaced? Who will be the primary beneficiary after the OBR is paid?
FHA Loan: - done reading

Solar Energy Finance Association (SEFA)

Banks that are offering $0 down or near $0 down: - done reading

Some examples: - done reading - done reading - done reading - done reading - done reading - done reading (group purchase)

Tax equity:

SRECs, TRECs, RECs: - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading

RPS (Renewable Portfolio Standard): - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading

Feed-in tariff: - done reading - done reading - done reading - done reading - done reading

Net metering: - done reading - done reading - done reading - done reading

As of January 2012, only four states do not have net metering policies ‐ South Dakota, Mississippi, Alabama and Tennessee. These programs are for utility customers who generate their own electricity and feed excess energy back into the grid. Net-metered customers may use grid energy when their electrical demand exceeds their solar electric system's output. Solar electric credit rates are applied to the customer's total electric use and are shown on the utility bills.

The credit rates and rules vary from state to state. Unused solar electric system credits may expire in a specified time period or they may be carried over from year to year. The credits may only be applied to the utility bill or you may be allowed to get a refund check at the end of a designated period, usually the end of the year. - done reading (good explanation between PPA and leasing) - done reading (10kw DIY kit for $21k - $6k federal tax credit = $15k) (10kw DIY kit for $18k - 30% federal tax credit = $14k) - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading (talked about distributed generation: rooftop solar is better than coal turbine in every basement.) - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - Cost of module up to year 2013 - done reading - done reading - infographic on average cost, saving, payback period - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - Free Ultimate Solar System Buyer’s Guide - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading - done reading

In some areas, a combination of plummeting solar photovoltaic costs, local and federal incentives, and escalating utility electricity rates have made flat-out ownership of a solar system a good investment with returns as high as 5 percent, depending on location.

In many places in the U.S., power purchase agreements and solar lease providers like SolarCity, SunRun, and Sungevity can offer zero- down solar leases that save you 15 percent from your old electricity bill from day one. While more of an immediate payback contract than an “investment,” the lease option opens up your bank account to put saved money to work elsewhere. Since retail electricity rates historically increase every year, financial returns can expand over the term of the lease.

What are SRECS, TRECS, RECs?

SREC stands for Solar Renewable Energy Credit / Certificate. Think of an SREC as a coupon. Every time your solar power system finishes generating one megawatt of power, it spits out one of these coupons. If you have a nicely oriented, non-shady roof and 5kW of solar panels up top, you’ll generate about 7 of these SRECs a year. You can then redeem each coupon for cash at whatever it happens to be worth at the time. Now, here’s the tricky part… what it’s worth at the time… is weird… and how you “redeem” it… is weird.

TRECs are simply SRECs with a different letter in the front to confuse you. All that’s different is that the ‘T’ stands for “tradable”. This potentially means money for homeowners who start trading the RECs their systems produce. Eventually, even California will have TRECs.

Depends what state you’re in but in NJ, about $700. If the New Jersey utilities don’t meet certain renewable standards, they are penalized. Therefore, they gladly buy SRECs at any rate under what they would be penalized for (surprise, the penalty is about 700 bucks). In 13 other states, the worth of SRECs are all over the map. The good news is, if you own a solar system outright, you are already generating SRECs (woot.). They may have a shelf life (and so you may not be able to monetize all the ones you’ve created), but once they are available to trade in your area, you can reap some cash.

Some utility choose to implement what is called an SREC loan. The loan can be re-paid with cash or by using Solar Renewable Energy Certificates (SRECs) with a minimum floor price for each credit guaranteed by PSE&G (a utility in New Jersey). With this guarantee, solar loan customers can be assured that the SRECs generated by their system will have a substantial value for the life of the loan.

As renewable generators produce electricity, they create one REC for every 1000 kilowatt-hours (or 1 megawatt-hour) of electricity placed on the grid. If the physical electricity and the associated RECs are sold to separate buyers, the electricity is no longer considered "renewable" or "green." The REC product is what conveys the attributes and benefits of the renewable electricity, not the electricity itself.

How can I trade my SRECs, TRECs, RECs for money?

  1. Option 1: Trade them on the open market (which may or may not be possible).
  2. Option 2: Sell them to an aggregator.

Option 1: Register your solar system with WREGIS-Western Renewable Energy Generation Information System, and then trade them yourself on the open market. Online marketplaces will become more and more prevalent and there are a few that exist already. I hesitate to link to these because I am not sure which ones are the best to use. I’ve been getting into this more lately and will have better input to update this post. But for now it’s a considerable amount of work and option two is what most people opt for.

Option 2: There are companies that make a business trading these and there will be more coming. They will pay you cash for SRECs under a contract, where they basically purchase all the SRECs that your solar system will generate for a number of years. I’ve seen 1-year, 5-year, 7-year, and more contracts for this. SRECs only have a current day value, so the aggregator is making a guess as to what they will be worth. If it’s a 1-year contract, you can probably nail down the spread they are taking (difference between what you could get trading it yourself and what they will pay you for it) and… it’s probably worth it. In multi-year contracts there is more speculation about their future value, so it’s really impossible to say what’s a better deal, it’s just about risk. You’d be paying them for not having to take the risk on what they are worth in the future.

SRECTrade, Alternative Compliance Payment. GATS account to my Flett-exchange. Once I’ve earned an srec, I can either post on the GATS bulletin board, or I can transfer that srec to my flett exchange account.

First, WREGIS is one of several regional tracking platforms. Other platforms include NE-GIS in Massachusetts, NC-RETS in North Carolina and PJM GATS in the Mid-Atlantic. They are all similar since the technology behind them was built by the same company, APX out of San Jose, CA.

Second, I’ll add that it is important that readers not only pay attention to their own state’s SREC markets, but also to state markets around them. Every state has different rules regarding out-of-state SRECs. For example, there’s a corner of Illinois, Michigan and Indiana that are eligible to sell SRECs into Pennsylvania where prices are well over $200 per MWh/SREC – I bet there aren’t too many people there who know that. You may get an Aggregator approaching you with what might seems like a great deal for your SRECs in Kentucky only to find out he’s making a 4X profit on them in Ohio.

Finally, to comment on long-term contracts with Aggregators, not all Aggregators are speculating. The good ones will have contracts with buyers on the other side and that is an important distinction. You don’t want to get caught up in a contract with a speculating Aggregator who goes bankrupt when the market price drops below his or her expectations. While there is no doubt that spot transactions for SRECs are risky as prices will fluctuate, the reality is that there is also a lot of uncertainty on the upside. We often hear from solar owners who locked into 5+ year contracts at $150/SREC with Aggregators in the early years of the New Jersey SREC program only to watch the SREC values go up to $700. If you check the state’s trading statistics, there are still people getting only $150 an SREC in New Jersey! So the risk is on both sides of the equation. With that said, the Aggregators provide a valuable service to the solar community and there are plenty of great ones out there. I think it is important to find one you trust. In the meantime, feel free to give that “open market” a try!

SRECs are in fact a “credit” for the amount of clean solar energy that your solar panels produce. Dirty utilities in some states need a certain amount of these credits in order to comply with the State’s Renewable Portfolio Standards (RPS).

Currently, it depends largely on your state, sometimes your utility, the laws that have been passed in regards to the RPS, and how much the SREC is worth on your local SREC market. The SREC market is similar to a stock market…in some states. Supply and demand determine the price.

This means that 1 SREC in Connecticut will not be the same price as an SREC in New Jersey, and visa versa. In fact, depending on the State and market, that SREC could be worth, say, $50 one month or $200 another month–in the same state. Again, think Wall Street.

Your solar or wind system must be tied to grid to get SRECs. This is not a program for off-grid homesteaders.

Because every state is different. With some states, utilities have their own special SREC programs. Some states allow you to sell your SRECs directly to the market. Some utilities will give you a lower upfront State solar rebate if you decide to keep your SRECs instead of selling them to the utility at a set price for a certain time period. Entire states, like New Jersey, let you to keep your SRECs and let you sell them at a scheduled SREC auction…or to a middleman who does this for you. Some SRECs are guaranteed a steady per kilowatt rate that your panels produce for a certain amount of time, say a 3 year period. The exceptions and variables are numerous.

When you sell your SRECs, you are selling the “environmental benefit” of your solar panels to someone else, like the utility, who by law needs clean power. Think Vampire. You’re selling the “green soul” of your solar panels. Your panels become the Solar Undead.What does this mean in practical terms?

In effect, it means that you personally can no longer claim to have green power on your roof. Yes, I know that the panels are clearly on your roof, but as far as the law is concerned, you as a home owner (or a business owner) cannot advertise or claim to produce clean green solar power energy. You’ve sold that right when you sold your SRECs.

NJ SREC prices for 2012 energy year dropped substantially due to the oversupply in the state. I guess that is a good thing for those of us who love solar but did slow down my payoff of the system I installed last year. They are starting to bounce back this month. I noticed on the SREC Marketplace website that they are up to $300. Not the $600 of last year but better than the low of $150.

If you make less than, let’s just say 50 SRECs a year, your best bet is to find an aggregator that bundles them up and sells them for you.

Stay away from the brokers and use SREC Trade. 3% commission is way better than the 25% commission those crooks charge!

The installer is a broker for srecs but charges 15% commission on every sale. I think that is too high and want to register as a seller myself. would be my recommendation. It’s an open market, very low fees.

There are two was to sell your SRECs: on the spot market, and through a contract. They each have their own benefits. With a contract, solar system owners know that they will recoup the investment of their solar panels, and they know when this will happen. However since they are guaranteed that their SRECs will be purchased, the amount of money they receive for each SREC is significantly discounted from the current spot market price for SRECs. Thus the benefit of selling SRECs on the spot market is that it typically will yield the highest prices. Yet you must also consider that there is a fair amount of uncertainty regarding these markets- while we will see a demand for renewable energy continue, there is no guarantee that certain programs and incentives, such as SRECs, will exist down the road. Thus we can say that the spot market factors in a certain degree of risk, and this is while it gives higher prices, while a contract gives the solar panel owner a known, fixed revenue stream.

You aren’t required to sell your SRECs, yet the vast majority of people do. However as more people recoup the investment of their solar panels through selling SRECs, we might see some solar panel owners stop selling their SRECs and retain their green energy for themselves. This would cause the electricity suppliers to generate their own renewable energy to meet RPS requirements, at last!

Is income from selling SREC taxable?

Yes and no. There is currently no ruling on this (March 2010). The purpose of selling SREC is to recoup the cost of the solar panel. Until you fully recoup the cost of the solar panel, you can consider the income from SRECs as not taxable (perhaps you still have to declare it). After you fully recoup the cost of the solar panel, the income from selling SRECs is taxable. Consult with your tax professional. Think of it as follows: If you sold a lot of goods on Ebay, you should declare the income from that activity on your tax return. However you can also offset that income for tax purposes with the cost of the computer you would use to offer your goods for sale.

What is the point of keeping the SRECs, TRECs, RECs for yourself?

I do not know the answer to this question yet.

Does your solar panel have to be grid-tied in order for you to take advantage of SRECs, TRECs, RECs?

Yes. Your solar or wind system must be tied to grid to get SRECs. This is not a program for off-grid homesteaders.

Are SRECs, TRECs, RECs the same as carbon credit?


Are SRECs, TRECs, RECs the same as feed-in tariffs?


Can we get actually get paid for the electricity that our solar panel produce?

May be. Search for "California feed-in tariff", "California net metering", "California SREC"

Why do some people say that leasing is a bad deal?

Typically, leasing will save you some money, but it is a contract that last a long time, typically 15 years. To see why people say that leasing is a bad deal, do this:

  1. Look at the rate that you current pay your electric company, and determine how much you have to pay your electric company for the next 15 years. (A)
  2. Look at the rate that you would have to pay the leasing company (solar provider), and determine how much you would have to pay your solar provider for the next 15 years (B)
  3. Look at the price of the system as if you buy instead of lease (C).
  4. A - B: how much money leasing would save you over 15 years.
  5. B - C: how much money you loose to the leasing company (or how much money you would save over 15 years if you buy the system initially)

If you lease, at the end of the 15 years, you still do not own the system. You have the option to renew the contract, buy it (at some cost), or have it removed.

Beside being friendly to the environment, and saving money on electricity bill, what are the benefits of using solar panels?

  • Keep your rooms cool. Some times, even in the evening, when it is already dark, you still feel the heat. This is because the roof, the walls, and the earth absorb so much heat during the day that even when it is already dark, the heat is released back into the air. If your roof and wall are covered with solar panels, the heat absorb is converted in electricity and is not release back into the air at night. Even if you do not used this captured electricity to power an air conditioner, it seems that these solar panels are already keeping your house cool by absorbing the heat. You can use the captured electricity to power an air conditioner to further cool your house.
  • Get paid (potentially). If your solar panels are generating more electricity than you consume, you can potentially earn money for the extra electricity (perhaps not much) or earn credit for it, but you can consider using the surplus electricity for some other purpose.

How much can I really saved using solar panels? What can I do with a single solar panel? How much electricity can be generated by solar panel? How much electricity can be generated by solar panels if the full roof is covered with solar panels? Am I using as much power as I can capture from the sun? Can the power capture from the sun be enough to pay for my entire electricity consumption? If I have extra power from the sun, what can I do with the extra / surplus power?

We cannot do much with just a single panel with X by Y cells. However, solar panels can be combined into a grid. Most solar panels installed on the roof are … The answer to this question depends on a lot of factors. How much you save in term of money depends partially on how much electricity you normally consume. It also depends on how many solar panels you have, where you live, whether your house receive a lot of sun light during the day, the weather, whether your roof is covered with solar panels, and how big your roof is, the size of your home. If you are a solar DIY fanatic, you can consider installing solar panels on your walls, fences, and yards.

You can use the extra power to do scientific research. One idea is to use the surplus electricity (if any) to clean the air, especially if you live a long free-ways or high-ways. Solar powered lawn mower. Solar powered weed cutter. Solar powered drills. Solar powered rechargeable batteries. If you have other interesting ideas, please use the comment form below to share your idea with the world so that we can collectively make it happen.

How much does a solar panel cost?

A professional solar panel cost a lot of money, ranging from $10,000 to $30,000. However, you may qualify for tax-credit at the federal and state level. In the U.S., the feds are offering an energy tax credit on solar for 30% of its cost through 2016. You also might find rebates from your state or utility from the DSIRE database. Check with your tax adviser for detail. Before buying solar panels, make sure that you have done everything that you can to make your home energy-efficient such as installing insulation, using energy-efficient dryers, washers, heaters, refrigerators, TVs, etc.

Solar-panel systems are classified by watts of capacity. Systems under 10 kilowatts — 1 kilowatt equals 1,000 watts — are primarily for residential use. The average size of a residential solar-panel system is 5.2 kilowatts. Installation cost varies by the size of the system and the state where you install it, but averaged $6.10 per watt nationally in 2011, according to the U.S. Department of Energy’s Lawrence Berkeley National Laboratory. The median installed price of PV systems less than 10 kW in size that were completed in 2011 and ranged from $4.90 per watt in New Hampshire to $7.60 per watt in Washington, D.C. However, once local, state, and federal tax incentives were factored in, the installed cost of a 5.2-kilowatt system in 2011 ranged dropped byfrom a range of $0.90 per watt to $1.20 per watt for systems. In general, systems are cheaper in places like Arizona and California, where electricity is expensive, sunshine is plentiful, and solar has gained wider acceptance. Search the Database of State Incentives for Renewables & Efficiency for state and local incentives.

Systems installed between Jan. 1, 2009, and Dec. 31, 2016, are eligible for a tax credit equal to 30% of the cost. To qualify, the system must supply electricity to a residence and meet local building codes.

That means a 5.2 kilowatt system that costs $44,200 would, in theory, earn a federal tax credit of $13,260. (This is a simplified example. Consult a tax adviser.)

The tax break can be applied to a solar-panel system installed at your primary residence or second home. Take the credit for the tax year the system becomes operational. Use IRS Form 5695. The credit can’t exceed the total amount owed in federal taxes for that year, but it can carry over to future years. Save receipts and certification statements

A typical residential system should lower your electric bills by 25% to 50%, says Monique Hanis, a spokeswoman for the Solar Energy Industries Association. The average household pays about $110 a month for electricity, according to the Energy Department, so a solar-panel system should save you between $300 and $600 a year. The payback period will vary greatly depending on how sunny it is where you live, the size of your system, the cost of your system, and future swings in local electricity costs.

It’ll take anywhere from six to 30 years for the system to pay for itself.

Solar panels have a lifespan of 20 to 30 years.

Producing excess energy can accelerate how quickly you’ll recoup your investment. A battery can store extra electricity for later use, or you may be able to sell surplus energy back to the utility company in a practice called net metering. Many cities have net metering in place, but check with your utility company before you install solar panels.

Rebates and incentives offered by the local, state, and federal government can total as much as 50% of a system, depending on where you live. Some states even throw in exemptions for property taxes and sales taxes. The biggest is the tax credit from the Feds. Until Dec. 31, 2016, you’re eligible for a tax credit of 30% of the price of your installed system. Make sure your solar installer gives you a rundown of local and state incentives. And double check with your tax adviser.

Rebates, Incentives, and Credits. Strange as it sounds. Ask your utility company to see if they have any incentives, and rebates to help us going green. One big reason that states offer incentives is the RPS — the renewable portfolio standard. These are mandates some states have imposed on their utility companies, saying how much renewable energy (solar, wind) local utilities must provide their customers by such-and-such a date. Failure to comply means utilities will be fined heavily.

Here is a snapshot of residential solar pricing as of March 2014. Recently, we quoted a homeowner $25,990 for a 9.12kW rooftop solar electric system. 3 years ago, we quoted a 7.2kW system installed on the same home rooftop at $49,263. Prices have fallen a lot! Each system is customized to the site, so prices vary. But this is a good example of where pricing is now.

As a rough rule of thumb, 1 kilowatt of solar will produce approximately 1,000 kWh of electricity per year in the upper Midwest, and approximately 1,500 kWh per year in the sunnier Southwest. The average annual electricity consumption for a U.S. home is 11,000 kWh. Hence, a 10 kW solar energy system will provide most of the electrical power for an average home in the Midwest, and in the sunnier areas of the country, that same amount of electricity can be generated by a slightly smaller solar system.

According to this CSI page, California consumers are likely see an average price of around $8.50 per watt. That means about $34,000 for a 4KW system, the average size of a residential system

Regarding solar installation costs, the 2013 average gross installed cost (before incentives) for a solar electric system was about $5.00/watt DC for systems producing less than 10kW DC in Northern California. In 2014, we expect the average installed cost to decline to below $4.50/watt DC.

The average installed cost of a residential solar panel system was $4.72/watt.

What are the soft costs?

Today one of the biggest hurdles is soft costs – the price of obtaining permits, connecting your system to the grid, and having everything inspected (whether your installation is pro or DIY). On average, soft costs add more than $2,500 to the price of home solar.

Reducing paperwork and cutting red tape helps installers be more efficient and lets them pass savings on to you. In Chicago, for example, recent streamlining has trimmed permit wait times from 30 days to one day — a huge boon for solar installation efficiency.

What is the conventional route of paying solar?

The conventional route to rooftop solar is to buy some panels and enjoy the payback … in five to 10 years. This restricts solar PV to those willing and able to a) cobble together enough cash or get a home equity loan in crappy economic times, b) stay in the home long enough to earn positive returns.

What is solar leasing?

With a lease, you don’t own the panels on your roof; they are owned, operated, and maintained by a solar leasing company like Sunrun, SolarCity, or Sungevity. The solar company effectively becomes a utility. You pay them a monthly fee for the electricity the panels produce. At the end of the lease period (typically 15-25 years), depending on the details, you can re-up the lease, buy the panels, or have them removed.

Ideally, a homeowner will be paying less for electricity than they were before. Their utility bill will be lower because the house is now getting some power from the solar panels on the roof; those utility-bill savings should be enough to offset the lease payment. For now, though, that math depends on solar being subsidized with state mandates or rebates. Typically the solar leasing company would charge the home owner for the electricity generated by the panel at the rate which is cheaper compared to the rate charged by the typical electricity company. This represent a saving for the home owner without a significant upfront investment.

The solar leasing company can charge the home owner a competitive rate because federal and state subsidies pay for a portion of the installation. See

What does PPA abbreviate for?

Purchase Power Agreement.

How does a PPA work?

I don't know this yet. Need further research.

PPAs are popular lately because, like leasing solar panels, they require little or no down payment. Since you’re buying the electricity, though, rather than access to the panels, the PPA installer is responsible for maintaining and fixing them. To a utility, that looks a lot like someone trying to be a utility. See

A power purchase agreement (PPA) works similarly to a lease — both fall under the rubric “solar as a service,” under which a customer contracts to buy power from solar installations owned and run by third parties — but typically at a larger scale. See

What is "Community solar"?

Between 70 and 80 percent of people in the U.S. aren’t in a building suitable for rooftop solar. However, many of those people would like to be able to invest in distributed solar, not only for the financial returns but for civic or environmental reasons. “Community solar” refers to the many ways that groups of individuals can pitch in together to buy or lease solar. See

What are the 3 models of community solar?

  1. Utility-Sponsored Model: A utility owns or operates a project that is open to voluntary ratepayer participation.
  2. Special Purpose Entity (SPE) Model: Individuals join in a business enterprise to develop a community shared solar project.
  3. Nonprofit Model: A charitable nonprofit corporation administers a community shared solar project on behalf of donors or members.

What are the advantages of leasing?

Not having to worry about maintenance or monitoring and not having to deal with the tax paperwork, for example. Additionally, solar leasing companies can take advantage of some governmental incentives that you might not be able to take advantage of, and will presumably pass those savings on to you.

Why do some people says that leasing is bad?

Price comparison for solar electric (including leasing term):

Price comparison for solar thermal:

Should I lease or should I buy?

What’s a solar lease or solar power-purchase agreement?

In a lease, a customer pays for the solar power system over a period of years, rather than in an up-front payment. Often customers can purchase solar for little or no money down, and often realize energy savings immediately. In a power-purchase agreement, a customer agrees to purchase all the energy from a solar system over a fixed period of time. Read more about solar leases and PPAs on our third-party financing page.

If we go with leasing, do we own the solar panels after the leasing period?

What are the advantages and disadvantages of leasing?


What are the differences between PPAs and leasing?

I don't know this yet. Need to research to see the various terms on various PPAs done by various solar panel companies.

How should I shop for solar installers? How can I chose the right solar installers?

  1. Talk to your local utility company, and your local city building code ordinance, and ask them to see which solar panel installer they would recommend.
  2. Contact all the recommended installers. Ask them to send you bids / quotes. Negotiate.

Add up your lease payments and when compared to an outright purchase you’ll find that you’re easily paying up to 3 times more on a $0 down solar lease versus a purchase.

2. You’ll probably pay so much more for a lease than a purchase that’s it’s actually you who will be over-paying for your own maintenance, monitoring and insurance not the leasing company.

3. You’ll probably have trouble selling your home because what home buyer in his right mind will want to assume your lease payments on a used, outdated system when they can buy a brand new system with the latest technology and keep the 30% federal tax credit for thousands less. Don’t believe it ? Well then simply type the keywords “solar lease scaring buyers” into Google and you can read many accounts of homeowners and real estate professionals reporting difficulty when trying to sell a home with a 20 year solar lease or PPA attached to it.

4. After making 20 years worth of leasing payments, you won’t even own the system. It will still belong to the leasing company.

5. Check that quote from the solar leasing company and you’ll find that most of the time they won’t even tell you what brand of equipment they’re installing on your home. I wonder why?

6. Most if not all $0 down solar leases include an annual payment escalator that will increase your monthly payment by up to 2.9% per year for 20 years.

7. Remember, the solar leasing/PPA companies are still using Gen 1, boxy looking aluminum framed solar panels that were originally designed back in the 1970s, instead of the latest, Gen 2, Hyper X 2, one quarter inch thick, Bifacial solar panels. So you’ll be stuck with the same aging solar system without the ability to upgrade for the full 20 year term of the contract. If you bought your system instead, you can sell it at any time and take the proceeds from the sale and upgrade to the latest and greatest equipment. You can’t do that with a lease because it’s not your system to sell.

8. You’ll have to forfeit the 30% federal tax credit and any applicable cash rebate to the leasing company and you won’t get tax deductible interest on your lease payments. Only a $0 down solar loan or $0 down PACE financing will give you tax deductible interest and let you keep all of your incentives for a much better return on your investment.

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