The following resources cover the wide variety of payment options for solar PV systems.
Overview of Payment Options PACE Financing
Residential Systems Solarize - Group Purchasing
Commercial Systems Consider Other Options
Overview of Payment Options
Investing in a solar installation can be done in various ways. Residential and commercial solar systems may be offered through solar leases or power purchase agreements (PPAs), both of which can eliminate or minimize the up-front capital and allow payments over time. In these arrangements, a third party maintains and owns the system and would also take responsibility for any repairs. If a business is looking to purchase a solar system, financing may be available through a Property Assessed Clean Energy (PACE) district. Both residential and commercial customers can also help "buy down" the cost of a solar system by launching a Solarize campaign. If you are interest in getting solar, contact your utility provider to check out the options in your region.
For an overview of the different options available, view the Financing Solar in Texas webinar or the Financing Solar PV presentation.
Major things to consider for purchasing versus leasing are outlined below. You can also compare leasing versus buying with the Ultimate Solar Calculator from the Institute for Local Self-Reliance or with resources provided by the Solar Energy Industries Association's (SEIA) Third-Party Financing page.
|Purchase||Lease||Power Purchase Agreement|
|Requires capital to finance||Often requires down payment||Typically no down payment|
|Property owner responsible for operations/maintenance||System owner is responsible for operations/maintenance||System owner is responsible for operations/maintenance|
|Property owner claims rebates/incentives||System owner (3rd party) monetizes rebates/incentives||System owner (3rd party) monetizes rebates/incentives|
|Generally most advantageous to private (taxable) entities||Lease payment is fixed rate not tied to the power generated- typical 15 year term||Purchase the power generated at a fixed rate- typical 15 year term|
|Not a common approach for Government entities due to lack of tax benefits (unless grants or loans are available)||Common for government entities where PPA is not allowed|
For more information on solar loans, check out Energy Sage's video on Financing Your Solar Panel Systems with Solar Loans.
Regardless of the method you choose, it is important to understand the variety of incentives that are available—these should be factored into the cost of the solar system regardless of whether you're purchasing or leasing. The system owner takes these incentives, so in the case of a lease or PPA the incentives should be passed through to the property owner through reduced payments. Some grant and loan programs are designed specifically for solar and other energy efficiency projects. See Available Incentives for more information.
If you’re looking to purchase and take ownership yourself, you can evaluate home equity loans or mortgage refinancing if you don’t have cash on hand to pay in full. Some solar systems are offered through solar leases or power purchase agreements (PPAs), both of which can eliminate or minimize the up-front capital and allow payments over time. In these arrangements, a third party maintains and owns the system, and would also take responsibility for any repairs. For more details on residential options, click here. If you are interest in getting solar, contact your utility provider to check out the options you are in your region.
Just as with residential systems, businesses and other commercial systems can take advantage of solar leases or PPAs. If a business is looking to purchase a solar system, financing may be available through a Property Assessed Clean Energy (PACE) district. See below for more details!
For an overview of the available rebates and tax credits for purchasing solar energy systems for commercial and multi-family property owners and lenders, view the Financing Solar Energy Systems webinar.
PACE, or Property Assessed Clean Energy is a financing method available to businesses that allows them to finance 100% of a solar energy system. The PACE mechanism allows for a solar energy system to be cash flow positive from day one. PACE is a financing tool that reduces up-front cost for a property owner, but transfers financing terms with the property if it's sold. This can greatly reduce the perceived risk to the property owner and help make solar a more attractive investment. The State of Texas enacted the PACE Act during the 2013 Texas legislative session, authorizing local governments to implement PACE programs within their jurisdictions.
For an overview of this option, view the PACE Financing webinar.
View PACE Authority presentation
View City of Houston PACE presentation
Solarize - Group Purchasing
Solarize is essentially a group purchase option where participants benefit from economies of scale by grouping their projects together with a single installer. Larger jobs typically result in lower cost per installed kW. Both residential and commercial customers can also help "buy down" the cost of a solar system by launching a Solarize campaign. To learn about how to launch a successful campaign, read The Solarize Guidebook from the National Renewable Energy Laboratory, or check out one of the previous successful Solarize programs in this region and find out how they were successful!
Solarize Programs in North Texas
Solarize Plano is a project run by Plano Solar Advocates, a grassroots volunteer group of Plano citizens whose mission is to increase awareness and use of solar energy for electricity generation in Plano. Through Plano Solar Advocates' 2013 and 2014 Solarize campaigns, a total of 42 installations totaling 216.9 kW were installed. As of early 2015, this made up approximately 25% of all residential solar installations in the City of Plano!
Solarize Garland is a group formed to increase awareness and use of solar energy for electricity generation in Garland. As of August 2014, the Solarize Garland program had completed one group purchase project that led to installation of 8 systems totaling 36 kW.
Other Solarize Programs in Texas
Solarize Wells Branch
Solarize Wells Branch started with the Wells Branch Solar Energy Fair, hosted by neighborhood volunteers on October 28th 2015. That event was very well attended by local residents who wanted to learn about solar. People got excited about the solarize model and the project has moved rapidly from there. Email firstname.lastname@example.org or visit wellsbranchsolar.blogspot.com if you have questions.
Solarize Gillespie County
Public Citizen Texas is working with Fredericksburg SHINES to kick off a solar group purchasing and educational program in Gillespie County.
Residents of a neighborhood in Kyle are working with the Texas Solar Energy Society (TXSES) and Public Citizen Texas to launch a Solarize Kyle program. Email Karen Julian (email@example.com), Lucy Stolzenburg (firstname.lastname@example.org), or Kaiba White (email@example.com) if you’re interested.
Solarize San Marcos
The Texas Solar Energy Society (TXSES) is working with a social advertising class at Texas State to identify people interested in participating in a Solarize San Marcos program.
Consider Other Options
If installing your own solar system is not feasible for location or financial reasons, there are other options to consider, including renewable energy retail electric providers and community solar. See more details here!