How Financing Works

The federal government is subsidizing solar. So they provide homeowners an incentive by providing a 30% Investment Tax Credit. If you invest $10,000 in solar, you get a $3,000 tax credit. Then when you pay your federal taxes, you owe $3,000 less.

The county government is subsidizing solar. They administer the financing as a supplemental tax on your property tax bill through a program called Property Assessed Clean Energy, or PACE. So the cost becomes part of your property taxes that run with the property when you sell your home, not a lien that needs to be paid off. Additionally, the interest, and sometimes the entire payment, is tax deductible.

In a nutshell, the math goes something like this: first, there is the cost of the solar system; second, there is the cost of the administration of the program; third, since your first payment will not be made until reflected on your property tax bill in approximately eighteen months, those are financed into the assessment; and finally, you apply the 30% tax credit to reduce the assessment balance next year. This total is amortized over the term of the loan, resulting in semi-annual payments reflected on your property tax bill.

The long and short of it is that your payments are substantially lower than PG&E. And lower than any national solar company.