Financing Your Solar System

San Diego Solar Residential Financing

  1. Cash-Best option
  2. Home Equity Line of Credit (HELOC)-You benefit from the mortgage interest deduction and the rates are generally low
  3. Property Assessed Clean Energy or PACE (California AB 811)-Ask your HelioNation-Approved San Diego Solar Installer if your community offers financing through property taxes
  4. Home Improvement Loan- Most local credit unions or banks will have a good program
  5. Credit Card-Might carry higher interest rates

Property Assessed Clean Energy or PACE

The Property Assessed Clean Energy (PACE) financing program was designed so that homeowners can finance their solar electric systems through their property taxes.  This program was voted on in the California Assembly under AB811.

The loan terms are 20 years and the interest rates are 245 basis points above the 20-year US Treasury rate.  Currently the rate would be around 7%.  Since the loan is tied in with the property taxes, a homeowners credit does not weigh so heavily.  The main benefit is that homeowners do not have to come out of pocket for the initial cost of a solar installation.  In San Diego, the program is being administered by the Center for Sustainable Energy.

Commercial Financing

Power Purchase Agreement (PPA)

A Power Purchase Agreements (PPA) is an agreement between a Building Owner and a financier or PPA Provider.  The PPA Provider owns the San Diego solar system and the Building Owner is legally responsible for buying the electricity from them.

A Power Purchase Agreement is typically a long-term contract of 10-25 years.  The Building Owner benefits by buying lower cost energy and also hedges against future electric rate increases.  The PPA contract allows the Building Owner to benefit from cheaper solar energy without the initial costly upfront investment of a solar electric system.

The PPA Provider secures funding for the solar system and amortizes the cost over this longer term.  It then profits from the spread between the cost of the solar and the agreed-upon price of the energy that the Building Owner is obligated to purchase.  The PPA Provider maintains and insures the solar electric system, while also taking advantage of the rebates and tax incentives.