Finance options for home solar are growing

Finance options for home solar are growing


BY CHRIS KAHN
AP ENERGY WRITER,
NEW YORK (AP) - Rooftop solar panels usually sound great until you see the price tag. Even with generous tax breaks, a home-installed system can cost as much as an SUV depending where you live.

But what if you could put solar on your roof virtually for free?

Solar companies hungry to get panels on your home have come up with some innovative ways to finance complete solar systems.

Before you sign up, however, do the math and make sure it adds up. With so many local, government and federal incentives, it might be cheaper just to buy the system.

Here are some companies and financing plans that can get you into solar. In some cases the plans require no money up front, and the monthly payment can be paid with the savings from your utility bill.

LEASING

Solar companies in the Southwest have begun to lease solar systems. Companies like SunRun and SolarCity also take care of maintenance and other service issues you'd be on the hook for if you bought a system outright.

Leasing programs are beginning to expand outside of the sunny Southwest and may be coming to your town soon.

The payoff depends largely on where you live.

Colorado and Oregon residents would likely break even with a solar lease if their current electricity bill averages $50 a month, according to SolarCity. Yet in California and Arizona, where energy costs can run higher, the break-even point rises to $125 a month.

SunRun offers 18- to 20-year leases in California, Arizona, Colorado and Massachusetts.

Homeowners can put as little as no money down. But the more you pay upfront, the smaller your monthly lease will be.

Another plus is that the solar company sticks around to make sure everything is running correctly for the life of the lease, said Lynn Jurich, co-founder of SunRun.

“A lot of people are intimidated by this equipment,” Jurich said. “They're worried that if they put these big panels on their roof. There's going to be maintenance costs. There's going to be issues down the road.”

SunRun's Web page http://www.sunrunhome.com has a lot of information about how costs vary in different locations and the costs versus savings.

SolarCity offers leases in California, Arizona, Oregon and Colorado. It's expected to announce five new operating regions this year.

The company also has a calculator on its Web site http://www.solarcity.com/residential/solar-lease.aspx to help potential customers weigh the costs.

Both companies allow customers to extend leases, and they offer free removal when the lease expires.

Leases can also be transferred if the house is sold, which is usually the option that new owners choose, the companies say. The original owner would have to pay down the lease if the new owner did not want the system.

POWER-PURCHASE AGREEMENTS

Homeowners may also choose a variable plan that charges the homeowner for the amount o f power the system generates. Both SolarCity and SunRun will install a system, maintain it, and adjust the monthly fee according to how much power the system generates. In other words, homeowners are not penalized if their rooftop system fails to produce as much energy as expected. Such agreements also last from 15 to 20 years and are available in limited locations.

BUYING IN BULK

Another company allows consumers in the same town to work together to lower the cost of solar.

One Block Off the Grid (1BOG) groups potential buyers together, and when there's enough, it buys systems at a lower bulk rate. The company acts as a middleman and negotiates with solar companies for the best deals.

In addition to cost savings of 15 percent, the company works as a technical adviser for the homeowners, picking installers and panels that have a good track record.

1BOG, which makes money by charging a finder's fee to installers, already has established bulk-rate programs in numerous California cities, New Orleans, Denver and Phoenix. It's planning to launch new programs San Antonio, Honolulu, and parts of New Jersey. 1BOG also expects to expand in Austin, Texas, Miami, Aspen, Colo., Boston, Brooklyn, N.Y., Philadelphia, Chicago, Las Vegas, Portland, Ore., Seattle, Sacramento, Calif. and Washington D.C.

You can learn more about 1BOG's solar “communities” at www.1bog.org.

GOING COMMUNAL

There are still other ways to buy solar with little or nothing upfront.

Communities across the nation have created special finance districts that help people pay for solar through low-interest bonds. Homeowners can use the bonds to pay for solar systems and then finance the loan through higher property taxes.

The strategy, called property assessed clean energy (PACE) programs, allows the homeowner to spread the cost of buying solar over 20 years.

The Vote Solar Initiative, a nonprofit agency based in San Francisco that promotes solar energy use around the country, has become a major backer of PACE programs.

The group says solar finance districts have been cleared in almost 20 states, from California to Vermont.