HOME ENERGY GUIDE
Three ways to pay for solar—and why the details matter
This page does not sell anything. It explains what each payment method means, so you can make your own assessment.
Cash
- Upfront payment
- Pay for equipment and installation
- Who owns the system
- Homeowner
- Contract term
- No long-term power-purchase or lease contract
- When selling the home
- System generally transfers with the property
- Can payments change
- No contract monthly-payment term
Loan
- Upfront payment
- Down payment and installments depend on loan terms
- Who owns the system
- Usually the homeowner, subject to loan and lien terms
- Contract term
- Depends on loan term
- When selling the home
- Check outstanding loan and property lien
- Can payments change
- Check rate and payment terms
PPA / lease
- Upfront payment
- Usually no upfront payment; pay under the contract
- Who owns the system
- Third-party owner; homeowner buys power or leases equipment
- Contract term
- Commonly about 20–25 years; extensions depend on the contract
- When selling the home
- Review transfer, buyout, and other contract options
- Can payments change
- Check the escalator and other adjustment terms
Four things to check before signing
1. Annual increase
Check the escalator and its percentage; do not judge only by year-one payments.
2. Actual term
Check the initial term, renewal, extension, and early-exit terms.
3. Tax treatment
Do not count an expired credit as a current benefit; verify the applicable year and ownership.
4. Home sale
Read the transfer, buyout, relocation, and early-termination conditions.
No one payment method is right for everyone. If your bill is high and preserving cash matters, upfront cost may weigh heavily. If your bill is already low, review the numbers carefully before considering any option.
Further reading: California consumer guide
Understand your bill first
Before considering a long-term contract, understand your current rate and usage pattern.
Start a free bill review