Cash, loan, lease or PPA: the arithmetic salespeople skip
Loan-financed systems cost a median $4.50 a watt. Cash buyers paid $3.00. Much of that 50% gap is fees you never see.
Cash
The cheapest way to own solar and the quickest payback. If you can, get a cash price even if you plan to borrow: it tells you how much financing really costs.
Solar loans and dealer fees
Loans advertised at 1.99% or 3.99% often hide a dealer fee built into the system price. The lender pays the installer less, the installer raises the price, and you finance the difference. The Consumer Financial Protection Bureau has warned about it. Ask for the cash price and the loan price side by side. The difference is the fee.
A home-equity loan or a credit-union loan at a plain interest rate is often cheaper.
Leases and PPAs
A lease is a fixed monthly payment for panels someone else owns. A power-purchase agreement (PPA) is a price per kWh. Neither needs money up front, and for now the owner may still claim a federal business credit you cannot. Check three things: the escalator (a 2.9% annual increase raises the price 77% over 20 years), what happens when you sell the house, and the buyout terms.
Watch: the best short video on this step
More in solar videos and resources.
Checklist for this step
- I have a cash price from every installer
- For a loan: I know the dealer fee (loan price minus cash price)
- For a lease/PPA: I know the escalator, transfer and buyout terms