Affordable Solar

Solar System Ownership

Most people think Solar System Ownership carries a big up-front cost. One prevalent misconception is that leasing a solar power system is the only way to prevent this, and it’s simply not true. There are many ways to own solar with pay-as-you-go loans while you preserve the long-term financial gains of owning. Sonoma County Energy Independence Program has an excellent Financing Marketplace Tool which allows you to compare local financing options. Also, see our financing and incentives page for more information and government incentives.

For example, the estimates in the table below are based on the following information:

  • Monthly electricity bill: $175 (pre-solar)
  • Home has a South or West facing roof
  • System size: 5,000 Watts (5kW)
Own Lease
Total system cost / Lease payment $ 20,000 $ 33,991
Federal income tax credit (ITC) $6,000 (Goes to the lessor)
Net system cost after tax credit $14,000 $33,991
Additional electric costs over 20 year span $6,000 $19,492

Own vs Lease

­­­ Solar Lease or PPA option if . . . Own or Finance option if . . .
Savings Less concerned about maximizing financial benefits of a PV solar system Interested in maximizing financial benefits of a PV solar system
Cashflow Do not wish to make a cash investment Have cash or can borrow to invest
Cost Little or no money down Little or no money down. Loan can be absorbed into the long-term mortgage at lower rates, or folded into tax bill with the PACE program.
Maintenance A third party owns and maintains system Systems require little or no maintenance
Terms 20 years 5-20-year loans, range from 4-8 %
Offsets You do not qualify for any tax credits, depreciation, rebates or incentives You qualify for tax credits, depreciation, rebates and/or incentives
ROI You typically save 10-20% on your electric costs 10-30% annual ROI (return on investment)
Free electricity for 25-40 years
Selling Home Buyer will need to accept and qualify to take over the lease. If this is not possible you will have to buy out the lease. Planning to sell in a few years and want to increase its value quickly. Smooth process.
Value You put no money down but you will typically pay 2-3 times the cost of the system over the term of the lease. When you own, you receive the best return on investment, increase the value of your home and get free electricity.

Additional reading

“Top 5 Reasons to Stay Away from that Solar Lease,” Run on Sun blog post by Jim Jenal, February 16, 2015
“Rooftop solar loans beat out leases,” San Diego Union-Tribune, Feb. 12, 2015
Owning – better than leasing,” Solar Works blog, April 1, 2015



Vicki Vaughn

Vicki Vaughn, Solar Works’ administrative and commercial project manager,
rides her bike to work whenever she can and enjoys working on her organic
farmstead. Learn more about Vicki >>