Financing solar and renewable energy systems

Learn about financing, tax benefits and sizing your system

An initial investment in renewable energy can save your business money for years to come. PG&E is here to help you make informed decisions about bringing solar and renewable energy to your property.

Evaluate financing options for your solar or renewable energy system

Buying, leasing and Power Purchasing Agreements (PPA) are the three most popular options. Review our table to compare options and gain advice.

	Buy	Lease	PPA
Overview	Purchasing a renewable energy system means paying for it up front or financing your purchase through a bank loan. You can purchase the system from an approved contractor. You own the entire system, which most manufacturers guarantee for up to 25 years.	Leasing allows you to “rent" the renewable energy system for a set period of time. Generally, you pay a fixed monthly rate no matter how much energy the system produces each month.	Similar to leasing, a third party owns and maintains the renewable energy system on your behalf. Typically, you pay for the electricity generated at a rate per kilowatt-hour (kWh) specified in your agreement.
Benefits	Lower monthly electricity bills. Greater return on investment. Increased home value. Minimum 10-year warranty. Possible 30 percent federal investment tax credit and other deductions.	Lower monthly electricity bills. No large, upfront investment. Typically no costs for system operations, monitoring and maintenance. Fixed monthly rate, regardless of how much electricity is produced. Typically break even or saves money in the first year. Typically performance guarantees provided.	Lower monthly electricity bills. No large, upfront investment. Typically no costs for system operations, monitoring and maintenance. Fixed rate per kWh produced. Typically break even or saves money in the first year. Typically performance guarantees provided.
Additional costs	Expensive components, like the inverter, might need replacement after the warranty expires. Extended service agreement for maintenance, repairs and insurance.	The monthly price of your lease may escalate over time.	Rates per kWh typically increase over time.
Risks	You are responsible for maintenance costs. A performance monitoring system might be necessary as an add-on service to monitor your energy production.	If lease provider goes out of business, they may cease to provide contracted operations and maintenance. You should understand purchase or buyout options in your contract.	If lease provider goes out of business, they may cease to provide contracted operations and maintenance. PPAs usually include long-term commitments of over 25 years. You should understand purchase or buyout options in your contract.
Advice	You may be able to finance your purchase of a solar or renewable energy system by taking a business equity loan or secure line of credit, which is often eligible for tax deductions. Speak with your tax advisor about the implications before your purchase.	Agreements are long term, and specific fees may rise over time. Be sure to understand any changes in your monthly rate over the lifetime of the lease agreement, and ask about purchase options. Prepaid leases may also help reduce your monthly payments.	Agreements are long-term, and specific fees may rise over time. Be sure to understand any fluctuations in the price per kWh rate over the lifetime of the PPA contract, and ask about purchase options.

Find out what to do with your system if you sell the property

If you have purchased a renewable energy system, its value is incorporated into the purchase price of your property. Generally, a solar system will increase a property’s value and is viewed positively by potential buyers. If you have a lease agreement or PPA, you will need to work with the service provider to transfer the lease or PPA obligation to the new owner. In some cases, you may be able to buy out the remainder of the contract at fair market value.

View Available Incentives and Programs

State and federal governments, along with PG&E, offer incentives to help reduce the cost of installing a solar or renewable energy system. Consult your personal tax advisor to find out if you qualify, or review the information on the following websites:

PG&E has several incentive and other programs for customers who install a clean energy system. Visit Clean Energy Incentives and Programs.

How the size of your system affects costs

The size of your renewable energy system affects your upfront costs as well as your electricity costs over time. PG&E gives you the tools to help select the size of the renewable energy generation system right for your business based on your usage history, the size of your roof and whether you want to offset all or only a portion of your usage.

Take an energy checkup

We encourage you to first evaluate if you can reduce the size and cost of the renewable system needed for your property by completing energy-efficiency upgrades.

Visit Business Energy Checkup

Use our solar calculator

Get a quick estimate of the cost and size of the system needed to power your business

Use the Solar Calculator

Solar calculator tips:

System size is calculated based on how much energy use you want to offset. The recommended amount is approximately 85 percent in order to maximize your investment and not lose the value of excess energy exported to the grid. The size is also calculated based on your usage history or average bill.
Note the photovoltaic (PV) solar system size, which refers to the energy production of the PV solar panels. This is your first estimate of the “size” of the solar system you will need. If the system size proposed by your contractor differs greatly from this, have a conversation with your contractor about why.
View the estimated system details and costs associated with different financing options that are displayed.
The amount of physical space a solar panel system will require also is important. As a rule of thumb, you will need approximately 100 square feet of roof space for each kW installed.

Please note:

There is no financial benefit for installing a system larger than your property needs. Compensation for excess generation through Net Surplus Compensation (NSC) is set by the California Public Utilities Commission (CPUC) at roughly $0.02 to $0.04 per kWh and does not justify the cost of an oversized system.
Network upgrades may be necessary before you can install your system. Your contractor will work with PG&E to determine if upgrades are required and inform you of any additional costs.