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What Financing Options And Incentives Are Available?

Illustration of piggy bank, stack of money and a bank representing cash, finance and lease options for going solar

Saving money is the most common reason why our customers decide to go solar. By generating your own power and reducing your reliance on your local power utility, you can save hundreds of dollars each month for years to come.

When it comes to going solar, customers generally have four options:

Cash

If it is an option for you, paying cash up front for your solar power system can provide the maximum financial savings from going solar. When you pay cash, you own your system, immediately eliminate your monthly electrical bill and start saving from day one.

Using cash to pay for your solar energy system also can provide the shortest payback period on your solar power system, generally between 4 and 7 years. After that, you will have saved as much by cutting your utility bill as you paid for your system and will be getting free electricity from the sun.

Going solar by paying cash is a great way to go solar and quickly realize the financial benefits.

Learn more about buying a solar power system with cash
  • Maximum savings
  • 30% tax credit
  • Shortest payback period
  • Own your system
Graph showing benefits and savings of cash payment method

Solar Loan

Borrowing the money to pay for your system allows you to leave your cash in the bank and take advantage of all-time low interest rates. In taking out a loan to pay for your solar system, you also can qualify for the 30% Residential Renewable Energy Tax Credit to immediately reduce your energy costs.

Most property owners finance their energy independence and take out a solar loan to pay for their solar energy systems.

A solar loan can be paid back over either 12 or 20 years and requires a credit score of 700 or higher to qualify. While a the 12-year term provides a faster payback period, the 20-year term results in lower monthly payments.

Learn more about your loan options
  • No money out of pocket
  • Lower payments than current utility bill
  • 30% tax credit
  • Own your system
Graph showing benefits and savings of using a solar loan

PACE Loan

Some property owners choose to finance their solar power systems with Property Assessed Clean Energy (PACE). PACE allows California property owners to borrow as much as 15% of their home’s value to pay for going solar. The money is borrowed through supplementary county property tax assessments and paid back annually along with property taxes, usually for five to 20 years.

Property owners like PACE financing because it is levied against the property, not the individual, and can be transferred to a new owner if the property is sold before the assessment is paid off. Financing a solar system through PACE may also provide additional income tax benefits on top of the 30% Residential Renewable Energy Tax Credit.

Learn More about PACE financing
  • No credit score requirement
  • No personal debit
  • Tax-deductible interest payments
  • Own your system
Graph showing benefits and savings of using PACE financing

Lease / Power Purchase Agreement

It is also possible to lease a solar power system through what is called a Power Purchase Agreement. With this method of going solar, you do not own your solar power system. Instead, you lease the solar panels placed on your property and use the energy they generate, but the system is owned by another party.

Since you do not own the solar power system on your property, you do not qualify for the 30% Residential Renewable Energy Tax Credit. At the end of your solar lease term, you can choose to extend the arrangement for another term, remove the solar system from your property, or buy the system from the owner at fair-market value.

Learn more about your leasing options
  • No money out of pocket
  • Lower payments than current utility bill
  • Don't own your system
  • Good option if not eligible for tax credit
Graph showing benefits and savings of leasing a solar power system

Compare Your Options

As you can see, there are many options for paying for your solar energy system. From paying cash or taking out a loan to leveraging a financing option such as PACE or leasing a solar system from a third party, property owners who go solar now have more ways to pay for their systems than ever before.

As with any financial decision, we encourage you to consult with your financial advisor or tax professional to discuss all the details of each financing option and decide which is best for you and your individual financial situation.

At Sullivan Solar Power, we provide you all the financing options and let you decide what makes sense for your financial situation. We won’t try to force you into a financing arrangement that is more beneficial to us than it is to you.

Learn more about your payment options
Graph comparing savings of payment methods

Federal Solar Tax Credit and Other Incentives

Illustration portraying federal tax credit depletion over time and now is time to maximize savings

Federal and state governments have long supported solar power, including by offering customers who go solar valuable financial incentives. These programs can pay for a portion or all of the costs of installing a rooftop solar system and are a big reason why solar power has been growing so fast, not just around San Diego, Orange and Riverside counties, but the rest of the nation.

California incentive programs for solar customers have expired and will not be renewed, since they served their purpose of helping get the solar power industry off the ground. Innovation and competition now helps keep the cost of solar power lower, making going solar less expensive now than it ever has been. The federal Solar Investment Tax Credit (ITC) extends a 30% tax credit for both residential and commercial solar customers. Under the current rules, the federal tax credit will be reduced to 26% in 2020 and to 22% in 2021 before being eliminated for residential customers and remaining at 10% for commercial projects.

It should come as no surprise that the Golden State is a nationwide leader in the solar power revolution and that California previously created several incentive programs for property owners who go solar. These programs were used by thousands of property owners to make energy-efficient upgrades to their homes, businesses and other properties.

Regardless of which payment option you choose for your solar power system, it’s a better deal than continuing to pay your monopoly utility for as long as you live.