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

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 

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