A solar energy system is a substantial investment that should be diligently researched before installation. However, innovations in solar financing have made it possible to go solar without the large upfront costs and lower your utility bill from day one.
You can buy the system outright. It is a large upfront capital investment, but you have no monthly payments and enjoy free electricity for the 25+ year life of system. It's like buying a car and 25 years of fuel at the same time. As the system owner, you are responsible for system maintainance or you can hire someone to service the system when necessary. A cash purchase offers the best return on investment.
Solar Leases and PPAs
You can opt for a third-party model know as a solar lease or power purchase agreement (PPA), in which a private entity owns the equipment and you pay a monthly fee for the use of it (lease) or you pay a set price for the electricity generated by your solar system (PPA). In fact, solar PPAs were the financing choice for over 50% of the residential solar market in California in 2011. This model is designed to require little to no upfront cost and allow you to pay less for your own solar power than electricity from your utility (new monthly bill + monthly solar payment < old monthly bill).
Yet another option is the newly launched property assessed clean energy (PACE) financing program called GreenFinanceSF, which allows commercial property owners to secure a loan through the private market and repay the loan over 20 years to the City through their property taxes. For more information, visit GreenFinanceSF.org.