When you purchase a solar panel system, you’ll save money on your power bill for years to come. You may even be able to get your bill down to zero. And as an added bonus, you’ll be tapping in to clean, renewable energy.
But some homeowners haven’t made the switch to solar because they’re worried about how they’ll pay for the panels.
Solar Financing in San Diego with PACE
PACE is one option for solar financing in San Diego, as we described in a previous post. You pay back the loan over five, 10, 15, or even 20 years, and you don’t have to put any money down.
Other Solar Financing Options in San Diego
In order to qualify for PACE solar financing, you must have at least 10 percent equity in your home. If you haven’t built up that much equity, don’t worry—there are other options for solar financing in San Diego.
Some credit unions offer loans specifically for solar projects. For instance, San Diego Metropolitan Credit Union will loan qualified borrowers up to $55,000 to install solar panels, with rates from 1.98 percent to 4.99 percent.
There’s another great solar financing option for San Diego residents, too. It’s called a combo loan, and EnerBank USA is one of the biggest providers. The program allows homeowners to split their solar project into two loans. The first loan is for 30 percent of the project for a 12- to 18-month term, with no interest. That’s because the banks know that many homeowners qualify for a 30 percent federal tax credit for solar projects—the Solar Investment Tax Credit, which has been extended through 2019.
So, once you get your tax credit, you pay off 30 percent of your project costs all at once. Then, you pay off the remaining 70 percent over 10 to 12 years, at interest rates between 2.99 and 7.99 percent. And because you’re only financing and paying interest on 70 percent of the project cost, you’re able to get the lowest payment possible.
EnerBank USA only makes its loans available through approved contractors. RC Energy Solutions is proud to be one of them.
Even if a combo loan isn’t right for you, you should be aware of the federal tax credit. Some homeowners think that they won’t qualify because they don’t owe any taxes to the IRS at the end of the year. Maybe they even get a refund. But your eligibility isn’t based on your tax liability on April 15. Instead, it’s based on your income level and how much you’ve paid in to the system over the course of the year. The majority of San Diego homeowners will qualify. However, we encourage you to talk to your tax professional about your specific situation.
Of course, there are many solar financing options available. The loans from San Diego Metropolitan Credit Union and EnerBank USA are among the most popular offerings. At RC Energy Solutions, we create customized solutions for each customer, and we’ll go over all of your financing options with you. To get started, schedule your free consult today.
Solar Financing Options to Avoid
The PACE program offers outstanding options for solar financing in San Diego, and solar loans are another great choice. However, there is one thing that we recommend you avoid: a solar lease.
A solar lease might sound like the perfect way to get solar panels without a big upfront payment. But in the long run, you’ll probably wind up paying more than you would with PACE solar financing or a solar loan from a credit union.
In fact, using solar financing to buy your solar panels can save you up to 29 percent over a typical lease arrangement, according to recent findings from the National Renewable Energy Laboratory. The San Diego Union-Tribune reported on one homeowner whose energy bills soared to $575 a month each summer. She considered a solar lease but ultimately realized that purchasing solar panels with a loan made more sense economically.
Some customers enter into solar leases because they don’t have enough cash on hand to pay for solar panels outright. But the National Renewable Energy Laboratory found that you might pay 20 cents per kilowatt-hour for your power with a solar lease, while you’d pay just 14 cents per kilowatt-hour if you took out a five-year loan to purchase solar panels. Those savings really add up.
Besides, leases have a number of other drawbacks—check out our post on leasing vs. buying solar panels to learn more.
Make Sense of Your Solar Financing Options
At RC Energy Solutions, we offer a free in-home consultation to assess your energy needs and explain your options. We are a certified contractor for the HERO Program, YgreneWorks, and all other PACE providers. We’ve also helped customers get solar financing in San Diego with the San Diego Metropolitan Credit Union.
We’ll help you understand solar financing, so you can start saving money with solar power right away. Contact us to learn more.