PV Financing Options
Financing a PV system these days is similar to financing a car—you can take out a loan to buy a system, or you can lease one. And as in vehicle financing, buying incurs higher upfront costs, but you save more over time. Learn more about PV systems in Rooftop Revolution: The Cost and Benefits of Residential Solar Energy.
| Financing Option |
Purchase with Cash |
Home Equity Loan |
Other Loans |
Solar Lease |
Residential PPA (Power Purchase Agreement) |
PACE |
| Upfront Costs |
High: Full cost of PV system minus any upfront rebates |
Low: May be
fees at loan closing
|
Low: May be
fees at loan closing
|
Low: Some
plans may have down-payment option |
Low: Some
plans may have down-payment or prepayment
option
|
Low: Likely to have an upfront fee, usually less than $100 |
| Who owns system? |
Homeowner |
Homeowner |
Homeowner |
Solar company |
Solar company |
Homeowner |
| Ongoing payments |
None |
Monthly loan payments |
Monthly loan payments |
Monthly lease payments |
Monthly electricity payments |
Monthly escrow payments as part of mortgage* |
|
Who maintains the PV system (or pays to maintain it)?
|
Homeowner (maintenance contracts usually available) |
Homeowner (maintenance contracts usually available) |
Homeowner (maintenance contracts usually available) |
Usually the
solar company, but not always
|
Solar company |
Homeowner |
| Can homeowner take the federal tax credit? |
Yes |
Yes |
Yes |
No |
No |
Yes |
| Tax deductibility |
N/A |
Interest on loan |
No |
NA |
N/A |
Interest portion
of the assessment
|
| Term of financing |
N/A |
5 to 30 years |
Up to 10 years |
Up to 20 years |
Up to 20 years |
10 to 20 years |
*Homeowners without a mortgage will pay their special assessment at the same time as other property taxes (annually or bianually).
—U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy