Financial Benefits of Solar Power


Does a solar system make financial sense for me?

Solar is a smart financial investment because you will save money on electrical costs for years to come and increase your home value. Our customers who purchase their system typically see a strong Return on Investment (ROI) and expect to recoup their solar system investment within 5-10 years. Depending on the rebates and incentives offered in your area, you may be able to pay back your system even sooner. With an industry standard of companies offering multiple choices on financing options you can pick and choose which one is best for you. With solar lease, solar financing and power purchase agreement (PPA), you can finance your system with zero upfront investment, so that you can start saving right away. Homeowners can try this link to get a quick, high level estimate to purchase or finance a solar system.

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Will the government really give rebates and tax incentives for going solar?

Yes, the incentives and rebates are both real and substantial. Both state and federal governments offer tremendous financial incentives for businesses to choose solar. A combination of incentives and tax credits can cover 50% or more of the total cost! The most important thing to keep in mind about these governmental programs is this - they won't last forever. Now is the time to take advantage of the federal and state mandate to switch to renewable sources of energy! Once the adoption rate reaches its maximum level, the incentives will disappear.

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Solar Lease

What are my options at the end of the solar lease?

A Solar Lease is a very flexible way to go solar. When your solar lease ends, you have several good options to choose from:

  • You can upgrade to a new system with the latest solar technology under a new solar lease.
  • You can also extend your existing solar lease. Check with your company to see what their requirements are.
  • You can ask your solar company to remove your system for free.

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What if I move to a new home before the end of the solar lease?

You can pass on the solar system to the new owners in two ways. The great thing about both of these options is that solar homes typically have a higher resale value due to their substantially lowered electricity costs.

  1. You can transfer the solar lease to the new homeowners.
  2. You can prepay the lease and include it in the asking price.
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Can I decide to buy the system later?

Yes and No. Some companies will allow you to and some will let you renew your lease in five year increments.

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A solar lease includes full service. What exactly is included?

  • If anything goes wrong, your provider will alert you should there be any changes in the performance of the solar system. If the company sees a problem, they will give you a call to help you diagnose the problem and dispatch a repair team if needed.
  • Every solar lease includes an extended warranty on workmanship and hardware through the end of your lease. A good company will repair or replace any broken components at no cost to you. For instance, your inverter will likely need to be replaced around the 12th year—your solar provider will cover this.
  • Another cool fact about the solar lease is that its performance is guaranteed. If your system doesn't produce as much electricity as the provider promises, they will compensate you.
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    How does a "Performance Guarantee" work?

    Top solar companies offer a "Performance Guarantee" that your system will produce as much electricity as they can properly gauge. This takes into account normal weather variation and solar panel performance over time. The amount of electricity they will promise to deliver should be stated in your contract. Should the solar system fall short in producing the amount of energy they stated in the contract, many are obligated to compensate you. Be sure to read the fine print in your contract about these "Performance Guarantees."

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    Power Purchase Agreement (PPA)


    What is the difference between Power Purchase Agreement (PPA) and Solar Lease financing?

    Based on your state of residence and utility provider, residential financing offering is either a lease or a Power Purchase Agreement. Both types of financing are offered through most solar companies and both programs let you get started with zero or minimal upfront cost. Both financing plans are commonly used in the solar industry. With a Power Purchase Agreement (PPA), you pay a flat rate - solely paying for the power your solar system generates. With a lease, you pay a steady, fixed monthly payment. With a lease, though, you can make an upfront payment if you choose to do so. One easy-to-understand comparison is car rental agreements. A solar lease is like renting a car with unlimited mileage. A Power Purchase Agreement (PPA) is like paying for only the actual miles driven.

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    What is a Power Purchase Agreement (PPA)? What are its benefits?

    A PPA is an agreement between you and the solar provider in which the solar company covers the full cost of a solar system. In return, you agree to buy the power produced by the system. This allows you to avoid a large upfront cost. You will be "locking in" your electricity rate for the next decade. No matter how much the cost of utility electricity rises, you can be rest assured that your Power Purchase Agreement (PPA) rate is fixed and predictable for years to come!

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    What are my options at the end of the Power Purchase Agreement (PPA) term?

    A PPA is a very flexible way to go solar. When your Power Purchase Agreement (PPA) ends, you have several viable options:

  • You can upgrade to a new system with the latest solar technology under a new Power Purchase Agreement (PPA).
  • You can ask your solar provider to remove your system for free.
  • You have the option (but no obligation) to purchase the system at the end of the term for fair market value.
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    What if I move to a new home before the end of the Power Purchase Agreement (PPA)?

    There are a number of options if you move before the end of your agreement:

  • You can move the solar system to your new home if it is in the same utility district.
  • You can pass on the solar system to the new owners in two ways:
  • The great thing about both of these options is that solar homes typically have a higher resale value due to their lowered electricity costs.

    1. You can transfer the Power Purchase Agreement (PPA) to the new homeowners if they qualify.
    2. You can also pay off the balance of your Power Purchase Agreement (PPA) and include it in the asking price.

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    Can I decide to buy the system later?

    Yes. The Power Purchase Agreement (PPA) provides you with an option (but no obligation) to purchase the system at the end of the term for its fair market value.

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    Who maintains the panels?

    Free monitoring service is included for the life of the agreement. The monitoring service will alert you and your solar company of any changes in performance. If they see a problem, they will give you a call to help diagnose the problem and dispatch a repair team if needed.

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    What about warranties?

    Every Power Purchase Agreement (PPA) includes an extended warranty on workmanship and hardware through the end of your agreement. Most solar companies will repair or replace broken components at no cost to you. For instance, if your inverter needs to be replaced your solar provider will cover the repair or replacement.

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    How do I know my panels are operating properly?

    Power Purchase Agreement (PPA) includes a "Performance Guarantee" that your system will produce as much electricity as they promise, or the solar provider will rectify the situation for free.

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    Solar Guide works with the CSI-Solar Program which is funded by California investor-owned utility customers and is administered by regional Program Administrators under the California Public Utilities Commission. © 2012 Pacific Gas and Electric Company, San Diego Gas & Electric, Southern California Edison and Southern California Gas Company. Copyright and trademarks belong to their respective owners. All rights reserved.

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