Solar Panel Financing

Don’t let the initial investment required for a solar panel installation get in the way of your energy efficiency goals.

Semper Solaris > Solar Panels > Financing

SunRun offers a PPA, which stands for Power Purchase Agreement, allowing their customers to have access to high-quality solar panels without having to commit to purchasing and maintaining them on their own. Their Solar Power Purchase Agreements offer great benefits, such as limited risk, flexibility and reduced energy costs.

4 Ways to Go Solar

  1. CASH PURCHASE

This often shows the quickest ROI on a solar installation.  If you pay federal income tax, 30% of the purchase will go towards reducing your taxes (please consult with your accountant for eligibility). For example, this would reduce the net cost of a $10,000 solar installation to $7,000.

 

  1. FINANCE PURCHASE

Enjoy the benefits and savings of a solar system now and make payments over time.  Payments are usually less than the electric bill you will be offsetting.  The homeowner would have been paying the utility anyway. In this case, the homeowner can take the same money and give it to the finance company to pay for the system.  The homeowner can still take the FULL tax credit.  We have several dozen finance options to choose from to fit almost any situation.

 

  1. MONTHLY PPA (Power purchase agreement)

A system is installed at no upfront cost to the homeowner.  Typically, the installation, the equipment, and the production are guaranteed and insured for the life of the PPA.  The homeowner will pay the provider only for the electricity that the system makes, usually at a much lower price than the utility charges.  This will result in immediate and palpable savings as well as the security of knowing that the system is guaranteed to perform.  This is the most popular way to go solar in the USA.  The tax credit reverts to the system provider.  This is a good option for the largest immediate cost savings and for a homeowner who cannot use the tax credit.  We offer the best PPA in the industry: SUNRUN

 

  1. PRE-PAID PPA (The insider’s option)

This offers most of the benefits of purchasing with the least risk. In this option, the homeowner pays cash for the use of the system, but the provider takes the tax credit.  For example, on a $10,000 cash purchase, once the tax credit is applied the net cost will be $7,000.  On a PRE-PAID PPA the homeowner just pays the net cost of $7,000 and the provider takes the tax credit.  The system is installed, and the installation, equipment, and the production are guaranteed for the duration of the PPA.  This is typically the lowest cost, least risk option to go solar.  It is especially helpful if the homeowner does not have a tax appetite.  IF the homeowner like the security of a PPA but does not like the length of the arrangement the pre-paid PPA can be financed for a shorter term.

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As a homeowner, you can finance your solar investment through a conventional loan, or a Property Assessed Clean Energy Program (PACE Program).

Solar PPA

With a monthly PPA you pay nothing down and simply pay a fixed rate for the energy your system produces that is typically much lower than the utility rate. Power Purchase Agreements (PPA) are a contract where power is purchased from the solar company. With a solar PPA, you  pay per kilowatt-hour for the electricity produced by their solar panels.

Solar Energy Loans

Solar panel loans are similar to home improvement loans in that they are a conventional bank loan that allows you to pay for your solar panels by fixed monthly payments with competitive interest. Your primary lender would be the best option to get more information about your specific financial situation.

Keep in mind:

There is a very important difference between a solar panel loan and a regular home improvement loan. A solar panel loan allows you to leverage debt to own an asset that generates value for your home as well as generating electricity to minimize your electrical payments.

PACE Program

Property Assessed Clean Energy financing programs allow homeowners to invest in renewable solar power with little to no upfront costs. PACE can offer residential homeowners the freedom to cover up to 100% of their expenses. PACE can help you amortize your repayment period to up to 20 years, making sure your monthly payments are as low as possible.

Who can take advantage of PACE programs?

PACE is only available to homeowners in certain cities and counties that have decided to opt in for the program. Luckily, in California, most cities have offered to support PACE and you can find out if your city offers PACE financing for your solar panels here.

Did you know your solar panels may be eligible for a 30% tax credit?

Filing to receive your 2018 Investment Tax Credit from installing solar panels is a simple process but please always consult your tax professional.

1)   When it is time to file for your taxes, complete the IRS Form 5965 (Federal Solar Tax Credit Form).

  • Locate the line “Qualified solar electric property costs” on line 1 and enter the full amount of your expenses in that box. This dollar amount can be obtained from your contract or from the final total based on any change orders to your project if applicable.
  • Below that line will be a section on line 6 where you multiply the total by 30% to get the tax credit.
  • -Take the number from line 6 on Form 5965 and enter it on Form 1040 in the stated, “residential energy credits” section.

2)   Make sure you include the Form 5695 with your tax submission.

3)   In order to qualify for the credit, you have to own your solar panels. Leasing the panels or being part of a power purchase agreement will not grant you the ITC credit.

4)   Consult your tax advisor for more complete information on how to claim your 2018 tax credit.

The Federal Government has extended the Residential Renewable Energy Tax Credit which is good news for anyone considering an investment in solar panels. All taxpayers may be eligible for a 30% tax credit for solar power systems placed in service by 12/31/2019.

More information about Solar Panels

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