RESIDENTIAL FINANCING

Homeowners in New York now have many financial options when 'Going Solar'. Your selection of a financing option may affect who receives the incentives.

Cash

Homeowners and businesses can purchase a solar PV system with cash. In this option, the homeowner or business would receive 100% of all available federal, state, utility, or other incentives.

Lease

A solar lease is a financing structure whereby a third-party developer or financier develops, purchases, owns, and operates a solar PV system for an end user who pays a set monthly rate for the use of the solar system. Typically, the monthly rate for a solar lease is the same every month regardless of how much electricity is produced by the solar PV system, unless there is a lease escalator whereby the end user’s lease payments increase by a marginal percentage each year. The end user does not have to provide any upfront capital for the solar PV system. However, the third-party developer or financier takes a portion of the available federal tax incentives because they require a higher return on investment. The remaining majority of incentives are then built into the monthly lease price. Solar lease terms typically last between 10 and 25 years. Many solar installers provide their customers with a solar lease option.

Power Purchase Agreements (PPAs)

A Power Purchase Agreement, or PPA, is a financing structure whereby a third-party developer or financier develops, purchases, owns, and operates a solar PV system for an end user who pays a set price per kilowatt hour (kwh) for the electricity produced by the PV system. The end user typically does not have to provide any upfront capital for the solar PV system. However, the third-party developer or financier takes a portion of the available federal tax incentives because they require a higher return on investment. The remaining majority of incentives are then built into the PPA price. PPA terms typically last between 10 and 25 years. Many solar installers provide their customers with a PPA option.

Loans

Homeowners and businesses can purchase a solar PV system with a loan. In this option, the homeowner or business would receive 100% of all available federal, state, utility, or other incentives. Tax incentives will depend upon the tax liability of the end user.

New York State, through NYSERDA offers the On-Bill Recovery, Smart Energy, Renewable Energy Tax Credit Bridge and Companion Loans to help all New York State residents finance energy efficiency and renewable energy improvements made through NYSERDA’s programs.  NYS Residential Financing Programs