Solar financing

The most important thing to understand about solar loans is the dealer fee. A low advertised interest rate is often paid for by adding several thousand dollars to the system price. Ask every installer for their cash price and their financed price side by side. If the financed price is higher, the difference is the fee, and you are paying interest on it.

Leases and PPAs are structurally different: a third party owns the equipment. EnergySage notes that while the federal investment credit is no longer available for residential solar or batteries you purchase, a company that owns the system can still claim it and may pass some of that value through in a lower payment. That is a real mechanism, not a scam — but it means your savings depend on a contract, not on an asset you own.

Read the escalator, the term length, the end-of-term options, and the transfer clause before signing any lease or PPA. The transfer clause matters when you sell the house: the buyer must qualify and agree to assume the contract, and a badly written one can complicate a closing.

How to choose

Always ask for the cash price in writing

It is the only way to see the dealer fee baked into a financed quote.

Compare total cost, not monthly payment

A longer term with a lower payment can cost far more over 20 or 25 years.

Check the escalator clause

An annual rate increase in a lease or PPA compounds. Model it against a realistic estimate of local utility rate growth, not the salesperson's.

Understand who owns the system

Under a lease or PPA you do not own the panels and cannot claim any credit yourself. Maintenance and monitoring obligations should be spelled out in the contract.

Check state, local and utility programs

Federal support for purchased residential systems ended, but state and utility programs vary widely. DSIRE lists what applies to your zip code.