Local Financing Options for Affordable Solar

March 26, 2018

by John Matheny.

If you think powering your home or business with solar is beyond your reach, there are easily accessible programs that can make it very affordable.

Sonoma County Energy Independence Program (SCEIP) is a program that allows Sonoma County property owners to finance clean energy projects. In most cases, people who use SCEIP to finance a solar project will see a positive cash flow from the start, with savings that continue to increase every year. For properties outside Sonoma County, other Property Assessed Clean Energy (PACE) financing programs similar to SCEIP are available.

In the table below is a cost breakdown of a typical grid-tied solar project. The installation cost of this system is $36,259, and the 30% Federal Tax Credit of $10,878 brings the net price to $25,831. A cash scenario is on the left side of the illustration, and 20-year SCEIP financing is on the right. Both scenarios save $190,283 in electricity bills over 30 years. The overall cash investment is about $30,000 less than the SCEIP financing scenario.

The graph below shows a major financing benefit of SCEIP is being cash positive from the beginning. The dark gray color at the top of the graph shows how much would be paid in electricity bills without installing solar. The blue part represents using cash for the investment, and the orange shows the amount paid to SCEIP. The drop off at year 1 represents the benefit of receiving a 30% federal tax credit.

With SCEIP financing, the annual savings in energy costs usually is more than the loan payment. Additionally, the 30% tax credit can be taken in the first year. In this example, a grid-tied solar electric system provides a positive cash flow of $11,571 in the first year. The amount of money saved increases annually for 30 or more years, which is the expected life of the system. The cash-positive benefit of a solar investment is $130,882 after 30 years.

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