How Much Does Solar Cost?
Typically, 7 years of paying your PG&E bill will equal the cost of going solar.
Whether you pay that cost upfront or over time will affect the total cost of the project. There are several ways to pay for going solar. Ways to finance solar tend to be broken up into whom owns the equipment.
Here are some of the payment options and the differences between them:
Homeowner Owns Equipment and Receives Tax Credit:
- Cash – Homeowner has money saved up or borrows against a retirement account and does not need help paying the upfront cost of solar. This is common, and the cost of solar is often lower than people think.
Financed Purchase – Homeowner gets a loan and pays for the solar project. Financed purchases come in many shapes and sizes: home equity lines of credit, secured loans, unsecured loans, and even loans through your local tax assessor can be used (California First and HERO).
3rd Party Ownership
Solar Financing Company Owns Equipment and Receives Tax Credit:
- Power Purchase Agreements (PPAs) – Homeowners agree to give access to a solar financing company to install solar on the roof. The solar financing company installs a system and sells you electricity generated from the equipment installed. You are currently in a PPA with PG&E to buy electricity.
- Lease – Homeowner makes a monthly payment for the use of the equipment. Power generated from the equipment is the homeowners to use.
Approaches for $0 Down Financing
Mosaic PowerSwitch LoanMosaic is an innovative solar finance company out of Oakland that offers solar loans for purchase designed for residential solar projects with no upfront costs and use of the Federal Solar Tax Credit to pay down balance when received. Mosaic provides all the upfront capital for Allterra to design and build the solar system while you work directly with Mosaic on the loan term, how the Federal Tax Credit will be used, and what fixed monthly payment you would like.
Property Assessed Clean Energy (PACE) Loans
California First, HERO, and Ygrene are all PACE programs that may be available. All work with local tax authorities to finance solar projects with property taxes. The advantage of PACE program is homeowners with credit issues can still finance a solar project; PACE programs are based on clean title to the home and property taxes, not debt to income ratios and credit scores.
The 20 Year Difference: Ownership VS. Lease/PPA
The Cost of Doing Nothing
A homeowner that pays $120 per month for electricity today will spend over $79,000* over the next 25 years to power their home. The same homeowner could purchase solar and save 75% over the next 25 years. The choice is yours. *Calculated using historical PG&E rate increases over the last twenty years.