Sun dollars

Financing options make solar power affordable for working families

When solar power comes with free satellite TV, everyone will switch.

When solar power comes with free satellite TV, everyone will switch.

Want to go solar but scared of the upfront equipment and installation costs? It’s hard for typical homeowners to justify paying upwards of $20,000 to get up and running with rooftop solar panels. But going green when it comes to power consumption doesn’t have to be out of reach, thanks to new forms of financing.

One of the leaders in the field of residential solar power with affordable financing options is California-based SolarCity, which was founded in 2006. While the company will sell solar-power equipment directly to interested businesses and homeowners, it also has a financing program for residential customers called SolarLease.

“We created the lease program because the primary barrier to solar has been the upfront costs,” says SolarCity’s Jonathan Bass. “The lion’s share of our customers didn’t want to put a lot of money into the installation of their solar-power systems.”

About half of the company’s 3,500 residential customers across California, Arizona and Oregon take advantage of the plan, leasing the photovoltaic cells and related equipment and paying below-market rates for the electricity produced. According to Bass, most SolarLease customers will pay 15 percent less each month for their solar power and the equipment to generate it—with no money down—than they would otherwise pay their utility for fossil-fuel-derived electricity.

Another way for residential customers to reap the benefits of solar power without a lot of upfront equipment costs is through SunRun, a California company founded in 2007 on the premise that only if solar power is affordable and easily accessible can it cut into fossil fuel’s dominance in the electricity market. Unlike SolarCity, SunRun is purely a financing company in that it owns the solar-power equipment itself and sells the electricity generated to its residential customers at rates which typically undercut traditional utilities.

“With SunRun, you’re paying just for the electricity the panels produce, not for the equipment itself,” reports Lesley Beatty, the company’s director of marketing. Most homeowners lock in a fixed electricity rate with SunRun for an 18-year term at rates equivalent to or slightly lower than what traditional utilities charge. The savings come over the long term when standard electricity rates rise. More than 1,000 residential customers have signed on with SunRun’s unique financing program across California, Arizona and Massachusetts.

If homeowners don’t live in a place where one of these companies operates, they can always go it alone, especially with help from government entities. The Federal Housing Administration and the Department of Veterans Affairs both offer federally backed, low-cost mortgages that can be used for the purchase and installation of solar systems. Also, the Federal National Mortgage Association provides loans for photovoltaic electricity systems up to $15,000 over a 10-year term, while the U.S. Environmental Protection Agency offers loans for solar-power systems that exceed existing code energy-efficiency standards by at least 30 percent.

Beyond loans, a handful of cities in California, including Berkeley and Palm Springs, are experimenting with various financing incentives for residents interested in going solar. Be sure to check out the U.S. Department of Energy’s consumer guide outlining different solar financing strategies (“The Borrower’s Guide to Financing Solar Energy Systems”), available for free on the National Renewable Energy Laboratory’s Web site,

The upshot is that there has never been a better time to go solar, thanks to such pioneering efforts. These days solar accounts for only one-tenth of 1 percent of U.S. energy consumption. But the fact that middle-class families may now be able to afford to generate their electricity from the ultimate renewable resource is a significant broadside against the entrenched fossil-fuel-based energy infrastructure. While this may be music to the ears of companies like SolarCity and SunRun, it’s also good news for the rest of us and our descendents who must live in the carbon-constrained future.