Financing Options
Understand Every Way to Pay for Solar
There is no single best way to finance solar. The right option depends on your tax situation, cash position, risk tolerance, and long-term goals. We help you understand all of them — without steering you toward the one that benefits us.
Why Financing Advice Matters as Much as System Advice
Most solar companies offer one or two financing options — the ones they've partnered with. That means their recommendation is shaped by what's available to them, not what's best for you. As independent advisors, we walk you through every financing structure available in California and help you model the true long-term cost of each one before you sign anything.
Cash Purchase
Maximum savings. Maximum ownership.
Advantages
- Highest lifetime savings
- Full ownership from day one
- Captures the full 30% federal ITC
- No monthly payment obligation
- Simplest long-term arrangement
Considerations
- Requires significant upfront capital
- Capital is illiquid once invested
Paying cash for your solar system gives you the highest long-term return. You own the system outright, capture the full 30% federal Investment Tax Credit, and eliminate your utility bill without any monthly payment obligation.
How it works
You pay the full system cost upfront. The system is yours immediately. You claim the federal ITC on your next tax return, typically recovering 30% of the total cost. From that point forward, your electricity is essentially free.
Best for
Homeowners with available capital who want the highest return on investment and the simplest long-term arrangement.
Watch out for
Ties up capital that could be deployed elsewhere. If you sell your home before the payback period, you may not fully recoup the investment — though solar typically adds to resale value.
Solar Loan
Own your system. Spread the cost.
Advantages
- Full system ownership
- Captures the full 30% federal ITC
- No large upfront payment required
- Monthly payment often less than current utility bill
Considerations
- Interest increases total cost
- Loan terms vary — some include hidden dealer fees
- Requires credit qualification
A solar loan lets you own your system while financing the cost over time — typically 5 to 25 years. You still capture the federal ITC and all long-term savings, but without the large upfront payment.
How it works
You borrow the full system cost from a lender (bank, credit union, or solar-specific lender) and repay it in monthly installments. You own the system from day one and claim the ITC. Many homeowners use the ITC refund to pay down the loan principal in year one.
Best for
Homeowners who want ownership and long-term savings but prefer to preserve cash or spread the cost over time.
Watch out for
Interest adds to the total cost. Loan terms vary significantly — some include a 'dealer fee' that inflates the effective rate. We help you compare loan products carefully.
Prepaid Lease
One payment. No ownership. Predictable savings.
Advantages
- Single upfront payment — no ongoing obligation
- Lessor handles all maintenance and repairs
- Predictable electricity costs for 20–25 years
Considerations
- No system ownership — cannot claim the ITC
- Can complicate home sales
- Lower lifetime savings than cash or loan
A prepaid lease lets you pay for the right to use a solar system for a fixed term — typically 20 to 25 years — with a single upfront payment. You don't own the system, but you lock in your electricity costs for the lease term.
How it works
You pay a lump sum to a solar company or leasing entity. They own and maintain the system on your roof. You use the electricity it produces at a predetermined rate, typically well below current utility rates. At the end of the lease, you can purchase the system, renew the lease, or have it removed.
Best for
Homeowners who want predictable, reduced electricity costs without the responsibility of system ownership or maintenance.
Watch out for
You do not own the system and cannot claim the federal ITC. The system can complicate home sales — buyers must assume the lease or you must buy out the system. Maintenance is the lessor's responsibility, but response times vary.
Power Purchase Agreement (PPA)
No upfront cost. Pay only for what you produce.
Advantages
- Zero upfront cost
- Immediate reduction in electricity costs
- Lessor handles all maintenance and repairs
- No credit or capital required
Considerations
- No system ownership — cannot claim the ITC
- Annual rate escalators may reduce long-term savings
- Can complicate home sales
- Lowest lifetime savings of all options
A PPA is an agreement to purchase the electricity generated by a solar system on your roof at a fixed per-kilowatt-hour rate — typically lower than your current utility rate. You pay nothing upfront and nothing for the system itself.
How it works
A solar company installs and owns a system on your roof at no cost to you. You agree to buy the electricity it produces at a set rate for a fixed term — usually 20 to 25 years. Your monthly bill is based on actual production. The rate may escalate slightly each year, but is typically structured to remain below projected utility rates.
Best for
Homeowners who want immediate savings with no upfront cost and no ownership responsibility.
Watch out for
You do not own the system and cannot claim the ITC. Annual rate escalators can reduce savings over time if utility rates don't rise as projected. PPAs can complicate home sales — the agreement must transfer to the buyer or be bought out. Not all California utilities and jurisdictions permit PPAs.
Side by Side
How the Options Compare
| Aspect | Cash | Loan | Prepaid Lease | PPA |
|---|---|---|---|---|
| Upfront cost | Full system cost | None | Lump sum (partial) | None |
| System ownership | Yes | Yes | No | No |
| Federal ITC (30%) | Yes | Yes | No | No |
| Monthly payment | None | Yes | None | Per kWh produced |
| Maintenance responsibility | Homeowner | Homeowner | Lessor | Lessor |
| Lifetime savings | Highest | High | Moderate | Lowest |
| Home sale complexity | Simple | Simple | Moderate | Moderate |
Our Role
We Model Every Option for Your Specific Situation
The right financing structure depends on your marginal tax rate, available capital, credit profile, how long you plan to stay in your home, and your tolerance for complexity. We build a side-by-side financial model for your home — using real system costs, your actual utility rates, and current incentive levels — so you can see exactly what each option costs and saves over 10, 20, and 25 years.
Not Sure Which Option Is Right for You?
Schedule a free consultation. We'll walk you through every financing option available for your home and help you make the decision that's right for your situation.
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