Financing and Incentives

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Residential Solar Financing

Are you a homeowner who is interested in reducing your dependence on expensive utility electricity with a solar power system but you’re worried about the cost? At Solar Gain, we do everything we can to help make your solar energy project affordable. From cash purchasing, finding loan payments, or leasing your system, we will help you identify the best financing options available to you. Our team aims to discover every available incentive and financing option to meet the unique needs and goals of each of our customers.

At Solar Gain, we strive to provide homeowners with the lowest possible overall cost for their system, and our solar panel financing will eliminate or help you save on up front costs for your solar system. It is important for us to make financing your solar installation hassle free and to keep you apprised of all your options so that you can choose the right plan for your home. We help you take advantage of every available solar energy tax credit and energy rebate and offer several financing options to meet your unique needs.

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What financing option suits you as a homeowner? What incentives are available to you?

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Cash Purchase

Purchasing your residential solar PV system allows you to maximize the potential of your system. Although the upfront cost is higher, the long-term benefits of your system make the investment well worth the price. Because solar power systems significantly reduce your monthly payments on your electric bill, the system pays for itself over time.

While paying the total cost of your solar PV system is an investment, the cost is also significantly offset by the numerous incentives. California and Arizona residents have several options available to them that can cover a substantial portion of the system’s cost, and the system provides return immediately.

Federal and state incentives together provide the average homeowner a 10% to 15% return on investment, with a 7- to 10-year payback period depending on your utility electric rate. There are several options to finance the purchase of your residential solar panel system, including a home equity line of credit, refinancing, or a home improvement solar loan.

solar panels on roof with mountains in background

Types of Solar Loans

The largest advancements in solar over the past decade that benefits you have been in financing options, rather than the technology. If you are able to use the tax credits for going solar, a loan is usually the financing option that will save you the most money. Solar panel loans now are the most popular way fellow Americans pay for a home energy upgrade.

The increased adoption of solar through PV loans and cash purchases was due to several factors, including declining PV system costs, more widespread loan availability, and changing business models of national installers, among other reasons.

We have partnerships with financing companies, credit unions, and banks that give you the option to receive a loan to pay for your solar energy system.

Personal Loans

With a personal loan, the lender holds no collateral but instead makes the loan based on your credit quality, income, and debt level. This type of financing can be closed more easily and quickly than other loans. Interest rates may vary and terms are typically shorter than those of solar loans or secured loans. In addition, personal loans are usually only available to borrowers with good credit or a high income and with limited outstanding debt.

Solar Loans

Many solar loan providers secure the loan through a UCC-1 filing, which gives notice of the lender’s security interest on the solar equipment, but importantly not on your home. The UCC-1 filing gives the lender certain rights, such as repossession of the solar until the loan is repaid. Lenders consider solar loans with UCC-1 filings as more secure than personal loans. You will often see lower interest rates, longer-term options, and more relaxed credit and income qualification requirements on these types of loans, compared to other financing options.

Home Equity Loans and Lines of Credit

Solar financing can be secured through a home equity loan (also referred to as second mortgage) or a Home Equity Line of Credit (HELOC). Like other real estate loans, they require a closing, or settlement, at which all parties sign the necessary loan documents. To get to closing, the real estate agent typically is appraised to ensure the owner has sufficient equity in the property, the loan is registered with the county clerk, and taxes are evaluated. This is a heavily regulated process, particularly since the recent mortgage crisis. Obtaining a real estate loan requires time and money, but borrowers may get a relatively low rate compared with the rates of other types of loans.

Property Assessed Clean Energy (PACE) Loans

PACE loans are an option only available to California residents. PACE financing is a public-private partnership that provides you with the funds to make upgrades to your home, including solar panels, roofs, insulation, windows, heating, cooling, and other home efficiency upgrades. The financing is paid back through your county property taxes, which means that the interest may be deductible on your income taxes, much like mortgage interest. FICO score is not a determining factor for financing approval and terms range from 5 to 30 years. PACE loans are available in areas where the local government has opted into a PACE program.

Third Party Ownership

For most homeowners, we recommend purchasing your system with cash or a loan to maximize savings, but we also have partnerships that give you the option to save money on your cost of electricity through third-party financing. If you are low-income or retired then you may not benefit directly from a tax credit due to insufficient tax liabilities. In such cases, third-party ownership rather than direct ownership might be more appealing because the lender (also the system owner in this case) can monetize the tax credit and pass through a portion of the savings to you.

Solar Leases

A solar lease is the first type of third-party ownership option. This financing option allows you to rent solar panels and use the electricity they make. The monthly lease payment is often less than what you’d pay for the same amount of electricity from your utility company. You might make flat monthly payments for the full term of your lease, or you might have a small annual escalator, in which your payment gradually rises over the length of your term. The finance company that owns the equipment covers the warranty, maintenance and monitoring for the lease term, which is typically 20 years.

Power Purchase Agreements

Power purchase agreements (PPAs) are a type of financial agreement similar to a lease except that the finance company that owns the equipment sells the power generated to you. Your electricity rate that is typically lower than the local utility’s rate. The PPA may have a fixed rate that is typically lower than the local utility’s rate. The lower electricity price offsets the customer’s purchase of electricity from the grid.

Residential Solar Incentives

Governmental agencies at all levels recognize the importance of solar energy, and the push toward sustainable energy locally and by the federal government has never been stronger. Current incentives cover a significant portion of the cost of both residential and commercial solar PV systems. Solar Gain works with homeowners to guarantee that they receive all tax credits, federal solar rebates, and other incentives for which they are eligible.

Residential Tax Incentives

Generally speaking, the following tax incentives are available to all of our residential customers:

30% federal solar tax credit (available to Arizona and California residents)
25% Arizona state tax credit, up to $1,000 per residence
Energy equipment property tax exemption (property tax exemption for any increased value due to the installation of energy equipment)
Arizona sales tax exemption on solar equipment

Net Metering—Own Your Power

Net metering is a solar incentive that allows you to store energy in the electric grid and use it at any time you wish. When your solar panels produce excess power, that energy is sent to a grid, and you automatically pull from it whenever your solar panels are not supplying enough power for your home, such as during the night. Excess power is rolled over each month and once a year is tallied up by the utility, at which point they will pay you for any excess electricity your solar system generated (rates vary by utility). Net metering allows you to offset the cost of power drawn from the utility. Many utilities charge a small fee for this service.

Adding Energy Storage to Your Solar System?

In California, a battery backup system for your residential solar energy project qualifies for its own incentive. The Self-Generation Incentive Program (SGIP) is a tiered rate structure and the amount of money you can get back increases with the size of battery you choose. It is a limited program and early adopters will be able to take the most advantage of the incentive. Currently, homeowners in PG&E, SCE, SCG or SDG&T territories are eligible for a maximum incentive of $400 per kilowatt-hour (kWh). Solar Gain experts will help you maximize your money back on the system that works best for you.

We Care About Making Your Solar Project Affordable

Solar energy systems are an excellent way for homeowners in Arizona and California to reduce energy expenses. Don’t worry about the costs; we are here to help turn your dream of owning a solar power system into a reality. Contact Solar Gain today to learn more.