Finance Solar Power

Solar power just got more affordable

Do you think that you cannot afford to go solar?  What if I told you that you could finance solar power for your home or business?  I know…. I can hear you now.  What bank is going to lend money at a time like this?  Well, solar power is a good investment – both for you and the bank and other investors.

For a homeowner to install a solar panel system on their home, the cost can range from $10-60,000.  Not cheap, I know.  Back in the days when banks would allow you to refinance your house, you could simply take out a home equity loan and call it good.  Times are a bit different here in late 2008.  Fortunately, some solar panel installers have established programs to allow you to finance solar power directly.  Add in the fact of federal and state tax incentives, and solar power may not be out of reach at all.

Paying for panels gets easier

Have you heard of power purchase agreements (PPA)?  They work as follows:  A participating installer puts in a solar power system in your home, which is owned and operated by the developer.  The developer then sells generated electricity back to the homeowner at a very low rate (of course, lower than regular electric utility bills) during the length of the contract.  To the extent that the system is tied into the grid, the consumer may get two bills from both the utility and the developer.  However, larger systems may provide 100% of the required electricity, essentially eliminating the first bill.

Where can you find a company under which a PPA is available?  SunRun Generation LLC and Open Energy Corporation are both based in California.  They use power purchase agreements to help residential customers go solar.  SunRun Generation (now SunRun, Inc.) expects to broaden its service outside of California to allow more people to finance solar power.  Even more exciting is the fact that investors have been watching the PPA market and are more willing to step in to finance such projects.  We can expect to see more power provider agreements in the future!

For a lower up-front cost, people that finance solar power can still enjoy the regular benefits of switching to this renewable energy source, including lower electric bills, increased home value, and reducing carbon footprint.

Next up – SolarCity…. they lease solar power to you!

Let the sunshine in - and power up!

Yes, its true – you can actually lease solar power through certain companies like the one in the above video, if you would rather not finance solar power.  As described by SolarCity’s CEO:

“Our goal was to design a program that made it possible for families to pay less for clean power than dirty power, so they don’t have to choose between helping the environment and saving money.”

Seriously…. sign me up! The lease program works by the homeowner entering into a 15-year agreement with the provider and agreeing to pay a fixed monthly lease payment for the duration.  In exchange, SolarCity will install the solar power system and guarantee a level of system production that depends in part on environmental factors (shading, orientation, etc).  If your solar power system produces more than the guarantee, you can either get credit towards your usage, or even utility credits.

A solar power system lease may be just the thing to get you off the fence with respect to installing solar panels on your home.  After all, with the biggest impediment – cost – significantly lowered, you could be well on your way to a lifetime of electricity savings.  You can also buy yourself some “insurance” against rising electricity costs.  Your lease payments will never increase over the life of the system.

Want to sign up with SolarCity – you can do so in California, Arizona and parts of Oregon.  Connecticut also offers a solar lease program through U.S. Bancorp and the Connecticut Clean Energy Fund.  The state hopes that it will help over 1,000 households go solar.

So, now you know.  You can finance or lease solar power systems, which can make going solar a lot more affordable!  No time like the present.  Why not make one of your 2009 Resolutions to install solar panels on your home or business?  It can be a bright, Happy New Year for you and the planet.

Tags: finance solar power, lease solar power, power purchase agreement