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Solar Panel Financing Options - What's Best for You?

The installation of solar panels is becoming more prevalent among homeowners. There are many options for obtaining solar energy for your home. Additionally, when selling, the type of solar financing you have chosen can greatly affect the transaction. 

Purchasing in Full:

The cost for purchasing solar in full is approximately $20,000 for the average CA residence. The specific cost can vary depending on the size of system, equipment selections (inverters and panels), permitting, and installation costs. Other factors include how old your home is, installation location, and the Photovoltaic (PV) manufacturer. Depending on your previous electricity consumption you can expect annual rates of return that range between 10-30 percent. The majority of solar energy purchasers reclaim their initial investment in approximately 7-10 years and receive free electricity for the remainder of the system's lifespan (25 years). 

Home Equity Loans:

Many homeowners choose to utilize commercial lenders to affordably finance their solar energy systems. Home equity loans have been a very common method amongst homeowners to purchase their solar systems. This provides consumers with an affordable path that will eventually lead to ownership of the system without having to pay the full cost upfront. 

Power Purchase Agreements: 

A Power Purchase Agreement, or a PPA, is when a third party installs, maintains and owns the solar system and the consumer agrees to pay them a below market rate to use the solar energy for the duration of the agreement.  Homeowners who choose the Power Purchase Agreement option typically have minimal capital costs and pay specifically for the electricity their system generates at a set kilowatt-hour price. This financing option can save upwards of 30 percent on a monthly electricity bill without any upfront deposit necessary. At the end of the PPA the third party owner will decide to either remove or sell the solar energy system at fair market value. Keep in mind, since the homeowner does not have ownership of the solar energy equipment they will not be permitted to any incentives or rebates offered by the government.

Solar Leases: 

The option to lease a solar energy system can be looked upon as a rental agreement. ​Consumers reap the benefits of owning the system without the initial payment. Simply put, this is the same as renting the system from a company, similar to rental of any other appliance, while earning the benefits of the electricity produced.  The consumer pays a fixed monthly fee or lease amount which is determined by using the estimated amount of electricity that the system will produce in return for the rights to use the energy system. 

Property Assessed Clean Energy (PACE): 

Solar customers also have the opportunity to finance their solar energy systems through their local governments. Some local governments create property tax finance districts to offer loans for renewable energy such as solar Photovoltaic systems. PACE allows local governments to provide low-cost 10-20 year loans to eligible homeowners wishing to install this energy efficient equipment. The property owner then pays a greater amount in property tax bills to pay off the loan. These loans are permanently fixed to real property which provides homeowners peace of mind when it comes to their system's break-even point and the passing along of the system if they are selling the property. PACE financing is currently available in the following CA areas: Los Angeles, San Diego, San Francisco, Palm Desert, Sonoma, and Berkeley.

An interesting aspect of this option is that a PACE assessment can be looked upon as a debt of the property. This means that the debt is linked to the property itself versus to the homeowner. During resale, the repayment can transfer with new property ownership if the buyer chooses to take on the PACE obligation and the seller allows it to stay on the property. This addresses a common hesitation when it comes to investing in solar energy, as many homeowners decide against installation due to uncertainty about how long they will reside in the property. 

The Homeowner's Guide to Solar Financing, a resource from the Clean Energy States Alliance (CESA), can help you decide which solar panel option may be right for them. You can find it here:

Congratulations to our own Hazel Perera for Receiving the 2017 C.A.R. Rising Star Award! 

Hazel Perera recently received the California Association of Realtors® (C.A.R.) 2017 Rising Star Award at the Broker Conference in San Diego, CA. This Conference kicked off the CALIFORNIA REALTOR® EXPO which is a premier three-day professional development and networking event.

“One of the most important parts of Berkshire Hathaway HomeServices California Properties’ mission is to provide the highest measure of integrity, expertise, and sophistication, and Hazel exemplifies these standards throughout every facet of her business.  Hazel is quick on her feet and adept at resolving issues.  Beyond her value as an effective agent, Hazel also extends herself into the lives of her clients, following up on their completed transaction with support and helpful information. She is the embodiment of our company’s vision to bring joy and significance to life’s greatest investments because she epitomizes the ultimate professional REALTOR® conducting herself with integrity, honesty, and intelligence.  It is an honor to have such a Rising Star as Hazel Perera as part of my team.” – Marilyn Simon, Branch Manager, Pasadena Office Berkshire Hathaway HomeServices California Properties 

Congrats again, Hazel!

Contract Corner 

Seller Multiple Counter Offers 

There are many factors that come into play during negotiations when buying or selling a home. One of these possible scenarios involve a Seller Multiple Counter Offer.  When responding with a Buyer Counter Offer that contains an increased loan amount and the same down payment, it could risk your chances of obtaining the property.  The Residential Purchase Agreement requires buyers to have proof of the down payment and closing costs.  If you accept a Seller Multiple Counter Offer and fail to have the increased down payment (from the original offer) it could be considered a breach of contract that allows the seller to keep your deposit.

Navigating through the labyrinth of details and information of a transaction is exactly why you, savvy buyers and sellers, need an experienced team. The SARKISSIAN + PERERA GROUP is here to help guide you through this process and ensure that you achieve all of your real estate goals! 

Copyright© 2017 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of November 1, 2017. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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