Home Solar: New Financing Options Making it Affordable

Solar panel installation - (CC BY 2.0) by jonsowman Unless you’ve been off the planet for a few years or you’re still in climate change denial, you probably realize we need to get serious about taking full advantage of passive and active solar energy sources – right now! Climate scientists are now able to draw direct probability links between man-made climate change and specific weather events.

We can’t afford to wait for the political gridlock to clear on renewable energy investment – it won’t – so that means it will be up to us as a society to take whatever steps we can to reduce our dependence on fossil fuels and reduce the negative impacts for our kids and grandkids.

Solar panels have been around for decades, but the large initial investment in the system has always been the major deterrent to going solar. The price of residential solar systems is dropping rapidly and today there are several financing options for US homeowners to choose from. It’s time to give it some serious thought.

Impressive possibilities

Here’s an excerpt from an article – “The Secret to Solar Power” from the New York Times about Sungevity – a rapidly-growing solar power startup in California.

Sun in hand - (CC BY 2.0) by notsogoodphotographyEnough sunlight falls on the earth’s surface every hour to meet the entire world’s energy needs for one year. A plot of roughly 100 miles by 100 miles in the American Southwest, if covered with today’s industry-standard 15-to-20-percent-efficient solar panels, could generate enough power for the entire United States. This is not the whole story, of course; the sun shines only during the day, and as yet we have no efficient way to distribute and store the power that such a plot would generate (so that the energy could be used at night, for example). But the potential of the sun as a power source is nearly unlimited.

When we burn coal, gas or oil, we are simply harnessing an archived version of that same energy from the sun, stored in plant and animal life, compacted and preserved under the earth’s crust.

Sungevity’s owner, Danny Kennedy has seen his company grow exponentially in the past five years from 3 employees to 260 in 2012. He’s committed to solar energy and lays out the the simple rationale for why using solar power makes sense.

“Think about it this way. We’re killing people in foreign lands in order to extract 200-million-year-old sunlight. Then we burn it . . . in order to boil water to create steam to drive a turbine to generate electricity. We frack our own backyards and pollute our rivers, or we blow up our mountaintops just miles from our nation’s capital for an hour of electricity, when we could just take what’s falling free from the sky.”


Just for the record, despite the recession over the past four years, green tech industries have been growing rapidly, with investment in solar technology leading the way.

New financing models

Rooftop Solar installation on a Walmart - (CC BY 2.0) by Walmart Stores Many people dismiss the solar power option because of the high upfront investment – possibly $15,000 to 25,000 with a typical payback period of 10 to 20 years. The marked increase in solar installations in the US over the past few years likely has more to do with financing than technology. You now have options ranging from the traditional purchase arrangements where you own the the system (and get any Federal and State tax credits) to long-term (20 year) leasing arrangements and power purchase agreements with no upfront costs.

The decision to buy or lease may depend on your particular situation and preferences, and there are pros and cons to both arrangements. The leasing or Power Purchase Agreement (PPA) model, originally developed in 2003 for the commercial market by SunEdison, is now fueling the growth in residential solar panel installations. Since then, along with Sungevity, other players such as SunRun and Tesla’s Solar Roof have come into the residential solar market, some with similar financing models.

The bottom line is these companies are selling you the solar power from your rooftop installation, but they own and maintain the equipment.

Rapid deployment advantage

Men installing Solar Panels - (CC BY 2.0) by Allan Henderson I can see a real advantage in leasing for getting more solar panels installed quickly, since the leasing company (working with a local third party installer) looks after the permitting, design, installation and maintenance for the term of the lease. This saves a lot of hassle for homeowners who want to go solar but don’t have the resources to make it happen or don’t know where to start. Besides knowing you’re reducing your carbon footprint, your monthly payment will likely be set around 15% less than your current power bill.

As with any long-term lease, make sure you know what you’re signing. Consider the ramifications if you want to sell your home in ten years. The lease or PPA will likely be transferable to new owner – but what if they don’t want it?

Solar panels on porch roof - (CC BY-SA 2.0) by Dave DugdaleAnother issue to consider is backup power during a prolonged power outage. Grid-connected solar systems automatically shut down in the event of a power outage to prevent back-feeding power to the grid – a dangerous situation for linesmen trying to restore power. Some leasing contracts may prohibit you from connecting a backup generator to their equipment or you may need to pay extra for a battery backup system. Just be sure you know what your options are and plan accordingly.

Leasing vs buying

Solarshomes.com has a very thought-provoking video warning of the possible downsides of signing on to a 20-year solar panel leasing agreement. They focus on the key cautions about long-term leasing – but on the other hand – they’re selling solar panel installations. It’s definitely worth a look if you’re considering your options.

Germany leading the way on solar energy

In May of 2012, Germany set an impressive record – supplying almost 50% of the country’s electricity through solar installations – 22 Gigawatts – equivalent to the output of 20 nuclear reactors! The record was set only for a couple of days, but it shows the potential contribution of solar power to our long-term energy needs.

While solar can supply power during daylight hours we still need base-load systems to cover peak demand and to supply power when renewable sources like solar panels and wind turbines are unable meet demand. Right now that means coal, gas, and nuclear plants. In the longer term, it’s more of a storage problem than a supply problem, and people are already working on solving that. Like any other technological advance, it’s just a matter of time and money.

Reducing our electricity needs

sheep graze below solar array in India - (CC BY 2.0) by faulOne of the keys to slowing the impacts of climate change is reducing how much energy we use. While our technological advances rely heavily on electricity, the best way to reduce consumption is through energy efficiency and passive heating and cooling for homes and public buildings. Each year, more net-zero houses are being built and monitored to improve mechanical and building systems that will become the standard of the future.

Related articles on Stonehaven Life:

Home Energy Retrofit Economics
7 DIY Solar pop Can Heaters
Superinsulated House Design
Energy-Saving Home Cooling Tips
Add Flexibility to Plastic Window Kits

Images: jonsowman; notsogoodphotography; Walmart; Allan Henderson; Dave Dugdale; faul

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