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For homeowners thinking about going solar, there are a few different ways of financing a system, including lease financing, power purchase agreements and PACE financing.  It can all be a bit confusing at first but, by the end of this blog post, you’ll be a virtual expert and can assess which is the best option for your home.

• The Solar Lease:  A straightforward lease, like leasing a car-you make monthly payments and, at the end of the lease period, have the option of buying the system at fair market value, upgrading to a new system or renewing the lease.  At the outset of the lease, some companies (not Sungevity) require a down payment.  Under the terms of the lease, the amount of power your system generates is guaranteed.
• Power Purchase Agreement (PPA):  A PPA works like a lease but with one small difference:  Instead of guaranteeing how much power your system produces, the PPA bases your monthly payment on the amount of power your system produces.

As you can see, there’s not a whole lot of difference between a solar lease and a PPA.  Under either type of financing agreement, you’ll want to look carefully at the following details which differ depending on the installer:

1. Is a down payment required?  How much?
2. Does the monthly payment increase over time?  How much?
3. How long is the lease period?
4. What are your options when the lease expires?  (Most leases and PPAs provide some mechanism for buying out the system or transferring it to the new owner.  The Sungevity Solar Lease also gives you the option of having the system moved to your new home at no cost).
5. What services are offered with the system?  Make sure to ask about monitoring, maintenance, insurance and repairs.

What about PACE (Property-Assessed Clean Energy)?

PACE is an exciting development for consumers in areas of the country that are not serviced by installers who offer lease financing or PPAs.  If you participate in a PACE program, here’s how it works:  Using municipal bond revenues and federal stimulus dollars, your city or county pays for your system to be installed.  You pay the system off over time (usually 20 years) through an assessment on your property tax bill.  If you sell your home, the new owner must continue paying off the system.

Because the interest rate under PACE is usually quite a bit higher than for a solar lease or PPA, the grand total you pay for your system is likely to be higher under PACE.  Also, most PACE programs put a lien on your house in case you default.  (Sungevity, in case you’re wondering, does not use liens).

PACE works a little differently in every municipality and, in many areas, the programs aren’t up and running yet.  You can keep track of PACE developments in your area at pacefinancing.org.

Heads up San Francisco residents, you can use PACE to finance energy-efficiency and water conservation improvements, such as low-flow toilets, solar hot water heaters and insulation.

Now that you’re an expert on solar financing, share your wisdom with your friends and neighbors-there’s a solar financing mechanism out there for everyone!

-Erica Etelson

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Last night I had the privilege of attending a great event at the Oakland Museum of California “reporting back on the Dream Reborn Conference” in Memphis, TN on April 4th; the 40th Anniversary of the assassination of Dr Martin Luther King Jr. The theme of the conference was around building a green economy across America strong enough to lift people out of poverty while protecting the planet.

The report back was full of inspiring stories about clean energy companies collaborating with communities around the USA to train and employ people in meaningful careers; rewiring America, retrofitting buildings to be energy efficient and installing solar panels. Sungevity was proud to be one of the corporate sponsors of the event. This great video captures some of the mood of the moment:

I wasn’t in Memphis but I got just as excited at the event in Oakland last night about the huge potential of this movement for meaningful careers and green collar jobs (check out the pic of me speaking below). The subtitle of the event was “Building the Movement in California” for green jobs not jails. There was lots of great information from Green for All, a national campaign pushing Washington to support green workforce development; and the Ella Baker Center.

We have worked with this organization’s Green Collar Jobs Campaign since last year and proudly sit on the Oakland Green Employer Workforce Council, which is helping Oakland (and hopefully Richmond, Berkeley and Emeryville that make up the Clean Tech Corridor) develop training programs for the clean energy industry.

Another awesome organization featured at last nights event is Solar Richmond, whose trainees we hope to have on roofs from this July as part of their program. Long-term we’d like to see a Solar Danville, Solar Fresno and Solar San Bernadino. Ultimately we’d love to be supporting and providing work to people coming through training programs by groups like these across the country. That’s our Dream.

Shine on, dannyk.

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