Residential Solar Financing Options

Crack open the bank!

When I googled "solar financing" I thought I hit the jackpot when I found this PDF "The Borrower's Guide to Financing Solar Energy Systems" prepared by NREL.   When I opened it up, I looked for a date when it released, but didn't find the date until skimming through all the pages.  I thought it was a little dated considering it had Fannie Mae and Freddie Mac (although it seems Fannie Mae is still financing solar - even as it resists PACE financing) as the first two financing options.  The date it was released: 1999.  Don't you think Google could find a more relevant number 1 hit for solar financing options in 2011? In the past 12 years the solar landscape has changed about as much as the previous 1,999.

So what are all of the options out there for homeowners to finance a solar system?  The costs of panels has come down so much recently that in some areas it is a no-brainer to finance a solar pv system provided you plan on being in your home for more than 5 years (and even if you move, the solar panels could increase your home's value).

I first wrote about solar installer SunRun and their solar financing option just about a year ago today, but they have a nice section of their website dedicated to financing solar, just keep in mind that they do finance and install systems themselves, so their information will be a bit biased.

One Block off the Grid maintains an excellent page on solar financing. Their categories include (with their corresponding hyperlinks):

1. Solar Power Purchase Agreements (PPAs)
2. Solar Lease - also see the great post that CleanTechnica just put up on leasing solar.
3. Home Equity Loans - also see Energy Efficient Mortgage
4. SRECs: Solar Renewable Energy Credits
5. PACE Muncipal Financing  (Property Assessed Clean Energy)
6. Peer to Peer Lending (P2P)
7. Feed-In Tariffs (FIT)

But before those of you living in non-solar-friendly states get too excited (check out the 2010 state solar report card), keep in mind that many of these financing options are only available where there are good state incentives.  And if you're not happy with your state incentives, don't be afraid to let your politicians know that! But make sure to look into all the options yourself.  In a later post, I'll go into a little more detail into each of these options.  Have you used any of these options to finance your solar panel system?


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I actually was in a lucky position when I put solar on my home - with a perfect storm of incentives and rebates, I was able to just pay cash for what was left on my tab. (I basically sold my SRECs to the utility as part of this deal). But I found this interesting - looking at it seems to tell me that if I had financed with a home equity loan instead of paying cash, I'd actually have a higher ROI. I don't quite get that, but I guess it goes to show that this stuff isn't always obvious... I suppose it's got something to do with inflation vs. energy inflation vs. low interest rates right now...
Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems can receive a 30 percent tax credit for systems placed in service before December 31, 2016.....
Here's another good page about residential solar financing that lists a number of options: <a href="" rel="nofollow">Solar Power Financing</a>

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