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Understand the different ways to go solar

There are many different options for going solar. You can pay directly, take out a loan, or sign a solar lease or a power purchase agreement. The savings and costs of these different options vary widely, so how do you know which is the best for you?

Well, lucky for you, we're here to help you understand the choices and save as much money as you can. Here's the breakdown of your options.

The Breakdown for Owning Solar

Direct Purchase

Owning a SunStar photovoltaic system allows you to produce your own electricity, reducing your reliance on PG&E and cutting your overall energy costs. Additionally, you won’t be affected by the continuing increases in the cost of electricity from your public utility.

Because many of these benefits are exclusive to owning your own system, you experience the greatest savings and return on investment when you decide to directly purchase your system. Here are the benefits of a direct purchase, those that are bolded are exclusive to owning your own system:

  • Reduce electric bill by target of 80%
  • Increase in home value
  • Tax credit for 30% of cost of system
  • Locked-in energy costs
  • 25+ year system life

Solar Loan

Choosing to take out a solar loan is very similar to a direct purchase of a SunStar system, and you experience all the same benefits. The only difference is that you will take out a loan to pay for the system. With solar, you can actually pay a lot less for the monthly loan payment and new electric bill than your old utility electric bill and save money on day one of the system's operation.

Here are the benefits of owning your own system through a solar loan, those that are bolded are exclusive to owning your own system:

  • Reduce electric bill by target of 80%
  • Increase in home value
  • Tax credit for 30% of cost of system
  • Tax writeoff of interest on home equity loan
  • Locked-in energy costs
  • 25+ year system life

The Breakdown for Leasing and Power Purchase

Solar Lease

With a solar lease, you pay a fixed amount per month for the installed panels, much like you would with a car lease. This agreement may include annual rate increases as well. If you sell your house, you must get the buyer to take over the lease, or buy out the lease. It is unlikely to increase your home value by much, as it is not paid for. To initiate the lease, it’s likely you will need to provide similar credit information to the leasing company as you would to your credit union or bank for a loan, making it a similar effort but a much smarter move to finance the system yourself.

Here are the benefits of a lease:

  • Reduced electric bill

The total monthly cost of a lease or Power Purchase Agreement is usually a good bit more than the total monthly cost of a system you finance yourself with home equity credit.

Power Purchase Agreement

A Power Purchase Agreement (PPA) is similar to a solar lease. The main difference is that rather than paying a fixed rate for the solar panels, you pay for the energy that the panels produce. This agreement may include annual rate increases as well. If you sell your house, you must get the buyer to take over the agreement, or buy it out. It is unlikely to increase your home value, as it is not owned.

Here are the benefits of a PPA:

  • Reduced electric bill

Solar leasing or power purchase may seem like a good idea because you don’t need to pay much up front and you save some money each month over the cost of your electric bill. But like any investment, if you pay a third party to manage your costs for you, they take a cut and that leaves less for you. Leasing companies are basically loaning you the money to pay for your system and so your savings from your monthly electric bill will be lower than if you managed your loan yourself.

When you own your own system, either with a direct purchase or solar loan, you start experiencing savings immediately, increase the value of your home and take advantage of tax incentives. Why keep giving your money away to PG&E? Get a free site evaluation to see how much you can start saving with solar.
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Solar Loans

Solar isn't the scary, expensive investment many people think it is. Learn more about solar loans and how you can have a positive cash flow on day one.
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Tax Incentives

The federal government offers Tax Incentives to reduce the cost of your system. Combine these incentives with your electric savings, and save even more money. Read on to see how much you can save.
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