Learn about clean energy financing, tax benefits, and properly sizing your system

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

Evaluate financing options for your solar or renewable energy system

This section provides an overview of the options for financing a solar or renewable energy technology for your home. Owning, leasing and Power Purchasing Agreements (PPA) are the most popular options. Review the following table to learn how the options vary and gain helpful advice.

BuyLeasePPA
Overview

Purchasing a renewable energy system means paying for it up front. You can purchase the system from an approved contractor or manufacturer. Another option is financing the system through a bank loan. 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 time period. 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 your renewable energy system. Typically, you pay for the electricity generated at a rate per kilowatt-hour (kWh), which your agreement specifies.

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.
  • Extended service agreement for maintenance, repairs and insurance.
  • The monthly price of your lease might increase 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.
  • Might cease to provide contracted operations and maintenance if the lease provider goes out of business.
  • You must consider purchase or buy-out options in your contract.
  • Might cease to provide contracted operations and maintenance if the lease provider goes out of business.
  • PPAs usually include long-term commitments of over 25 years.
  • You must consider purchase or buy-out options in your contract.
Advice

You might be able to finance your purchase of a solar or renewable energy system by taking a home equity loan or secure line of credit. Both options may be eligible for tax deductions. Speak with your tax advisor before you purchase.

Agreements are long-term, with specific fees that might increase over time. Understand any changes in your monthly rate over the lifetime of the solar lease agreement. Ask about your purchase options. Prepaid leases might also help reduce your monthly payments.

Agreements are long-term, with specific fees that might increase over time. Understand any changes in the price per kWh rate over the term of the PPA contract. Ask about your purchase options.

Find out what to do with your system if you move

If you own your renewable energy system, its value is incorporated into the purchase price of your home. A rooftop solar system typically increases a home’s value, and is viewed positively by prospective homebuyers.

Lease agreements and PPAs work differently than purchased systems. Coordinate with your service provider to transfer the lease or PPA obligation to the new homeowner. In some cases, you might be able to buy out the remainder of your contract.

 

Understand tax credits and other incentives available to you

State and federal governments offer incentives to help reduce the cost of installing your renewable energy system. Consult your personal tax advisor to find out whether you qualify. Learn more information on the following websites:

Tax Credits for Solar System Purchase

Database of State Incentives for Renewables & Efficiency®


Select the right-sized renewable energy system for your home

The size of your renewable energy system affects your electricity costs. PG&E gives you the tools to help you select the size of the renewable energy generation system that is right for your home. Deciding factors include your energy use history, the size of your roof and whether you want to offset all or only a portion of your use.

First, reduce the size and cost of the renewable system needed for your home by completing energy-efficiency upgrades.
Learn more about the Home Energy Checkup

 

Size your system

Estimate the size of system you need using the PG&E solar calculator.
Use the Solar Calculator

Reference the following tips when using the PG&E solar calculator:

  • Be aware that generator system size is based on the amount of energy you want to offset. The recommended amount is 80 to 85 percent to maximize your savings. The size is also calculated based on your energy use history or average bill.
  • Chart showing a sample of financing

  • View the estimated system details and costs that are displayed.
  • Note the recommended photovoltaic (PV) solar system size, which refers to the number of panels and energy that the PV solar panels produce. This size is your estimate of the solar system needed for your home. The average size of a residential system is between four and five kilowatts (kW).
  • Discuss cost and size findings with your contractor.

The amount of physical space a solar panel system requires is also important. As a general rule, you need approximately 100 square feet of roof space for each kW installed.

PLEASE NOTE: There is no financial benefit to installing a system larger than your home needs. Compensation for excess generation through Net Surplus Compensation (NSC) is set by the California Public Utilities Commission (CPUC) at roughly three to four cents per kWh. This amount does not justify the cost of an oversized system.

Network upgrades might be needed before you can install a system. Your contractor works with PG&E to determine whether upgrades are required, and to inform you of any additional costs.

Visit Solar Calculator

Use the PG&E solar calculator

Get a quick estimate of the cost and size of the renewable energy system needed to power your home.

Download Solar Checklist (PDF, 163 KB)

Get our solar checklist

Make going solar easier with our step-by-step checklist.